11th Oct 2016 05:23
SYDNEY (Alliance News) - Oil major BP PLC has dropped plans to drill exploration wells in the Great Australian Bight, the company announced Tuesday, despite having already spent millions of dollars on the project.
BP said the decision followed a review of its global strategy and exploration opportunities, which had determined the project off southern Australia would not deliver enough reward on investment.
"In the current external environment, we will only pursue frontier exploration opportunities if they are competitive and aligned to our strategic goals," Claire Fitzpatrick, BP's managing director for exploration and production in Australia, said in a statement.
"After extensive and careful consideration, this has proven not to be the case for our project to explore in the Bight."
BP had planned to drill two wells in the Bight, attracting widespread opposition from environmentalists over the risk to delicate marine ecosystems.
Fitzpatrick said it was not a result of a change in the company's view of the region's "prospectivity," nor of the ongoing regulatory process, but "an outcome of our strategy and the relative competitiveness of this project in our portfolio."
BP was awarded exploration licences for four blocks in the Ceduna area of the Bight in January 2011. The proposed project was a joint-venture with a 30% stake from Statoil company.
There are other companies with exploration licences in the region, including Chevron I (US), Santos and Karoon (both Australian).
South Australia's Treasurer Tom Koutsantonis said every Australian has the right to feel disappointed by BP.
"They made a promise to the South Australian government that they would spend nearly AUD1.4 billion on exploration of the Great Australian Bight when they tended for these tenements and now they've withdrawn," he said. "I think they have done a bit of damage to their brand."
In the past few months, Australian regulator, the National Offshore Petroleum Safety and Environmental Management Authority, had repeatedly requested for more information about the impact of the drilling on the Bight waters as well as any potential oil spill.
BP's worst-case scenario modelling in the Bight showed that the oil was guaranteed to hit land if spilled, with experts saying the firm's projected spill response was too slow.
"We won ... We beat BP," the Wilderness Society, a campaigner against the drilling in the region, said on their Facebook page.
"We've spent a full decade working to protect South Australia's vital coastline and diverse marine life. So when we heard the same company that caused the tragic Deepwater Horizon spill was gearing up for an even riskier operation right here, in the middle of one of those marine reserves, we were furious," the statement said.
Greenpeace Australia oceans campaigner Nathaniel Pelle said the decision "will come as a huge relief to anyone whose business relies on clean, green seas in the Great Australian Bight, to the fishing communities, to the tourism industry."
"The risk to the Bight is not entirely over. There are still multiple oil and gas companies with titles in the Bight ... and it won't be over until all the oil and gas prospects have left," he said.
Sarah Hanson-Young, a South Australian senator with the Greens party, said they proposed a bill to permanently ban drilling on the Bight. "BP have said goodbye to the Bight, I say good riddance to BP," she said.
By Subel Bhandari, dpa
Copyright dpa
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