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Post-Ban Deepwater Drilling Permits Sought in GOM

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HOUSTON (Dow Jones Newswires), Oct. 25, 2010

The oil industry is getting ready to head back into the deepwater U.S. Gulf of Mexico in the wake of the recent lifting of the federal drilling moratorium imposed after the Deepwater Horizon disaster.

Exxon Mobil said Monday it was preparing an application for a permit with the U.S. Bureau of Ocean Energy Management, Regulation and Enforcement to drill a deepwater well at the company's Hadrian prospect, Exxon spokeswoman Margaret Ross said. Drilling of that well had been scheduled for last May, but was suspended by the enactment of the drilling ban.

Shell, one of the Gulf's top oil and gas producers, has already applied to drill a water injection well at its Mars field, and is in the process to submit an application to drill a deepwater well at the Tobago field, a person familiar with the situation said. Tobago would feed into the Shell-operated Perdido Hub, in the western Gulf near Texas.

Chevron, another large producer in the area, said it has started the process to obtain permits to drill in the Gulf's deepwater, but it didn't specify the names of the projects.

These companies' efforts indicate their eagerness to tap the deepwater Gulf's oil riches, despite a significant regulatory overhaul and the political backlash against the oil industry that followed the fatal April 20 blast aboard the Deepwater Horizon drilling rig. The explosion killed 11, unleashed the worst marine oil spill in U.S. history, and nearly brought BP PLC (BP, BP.LN), which had been leasing the rig, to its kness.

Federal regulators acknowledged the receipt of a deepwater drilling permit application for the U.S. Gulf, the first such request since a four-month moratorium on the practice was lifted earlier this month. A spokeswoman for the Bureau of Ocean Energy Management, Regulation and Enforcement declined to reveal the name of the company seeking the permit or at what water depth the company has asked to drill.

The moratorium on drilling, which was lifted Oct. 12, followed the April 20 explosion of the Deepwater Horizon drilling rig and subsequent 4.9-million-barrel oil spill.

Copyright (c) 2010 Dow Jones & Company, Inc.


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