BP Delays Libya Deep Water Drilling, But Insists It's Safe

LONDON (Dow Jones Newswires), Aug. 11, 2010

BP has pushed back the start of its exploration for oil in deep water offshore Libya for an unspecified period of time to ensure all its plans are in order, but the company and the Libyan authorities insist the drilling will be safe.

BP said it will proceed with its first deep water well offshore Libya some time later this year. However, amid fears in Europe that an accident similar to the oil leak in the Gulf of Mexico could trigger an ecological disaster in the Mediterranean, the company said it was prepared to mount a quick response to a large oil spill, should one occur.

BP and the Libyan authorities have the resources to deal with a medium-sized spill and should a larger incident occur BP has a contract with the world's biggest oil spill response center, based in Southampton, in the U.K., said company spokesman Robert Wine. "We would call them if they were needed in Libya," he said.

BP has pulled back from plans to drill the first Libyan well "within weeks," a time frame that was still in place as recently as July. "We were saying a few weeks ago we would start earlier, but making checks and preparations and carrying out tests on the drilling plan and equipment has delayed it," said Wine. "We are being thorough and making sure everything is in order before we start."

BP did not directly link the delay to the disaster in the Gulf of Mexico, but the company plans to publish preliminary findings of its internal investigation into the blowout on the Macondo well in late August. Any lessons from that inquiry will be applied to all international operations, said BP spokesman David Nicholas.

The chairman of Libya's National Oil Company, Shokri Ghanem, said BP's operations will have strong oversight.

"We continually follow-up with companies and we are certain before allowing any companies to start drilling onshore or offshore the environmental procedures are followed exactly so that damage to the environment is avoided," said Ghanem. "Libya has well defined rules and regulations and there are severe consequences for international oil companies that do not follow them."

Despite these assurances, BP's plans to drill at least five wells in the Libya's Gulf of Sirte at depths greater than Macondo have some people worried.

Stefania Prestigiacomo, Italy's environment minister, told the Financial Times earlier this month that plans for deep water drilling in the Mediterranean, "give rise to serious concern."

"A moratorium could be a right approach for potentially dangerous drilling...to give Europe time to define a new and specific strategy for the Mediterranean especially in light of the risk exposed by the Deepwater Horizon spill," Prestigiacomo told the paper.

Libya is already a major oil producer, but the bulk of that comes from onshore or shallow water facilities. It has little experience supervising the risks of deep water drilling. Despite the looming deadline for drilling to commence, Libya is the only Mediterranean country aside from Croatia not to have a contingency plan in place for handling an oil spill in its waters.

"At the moment, they haven't got any contingency plan adopted," said Gabino Gonzalez, a program officer at the Regional Marine Pollution Emergency Response Centre for the Mediterranean Sea, or REMPEC, an independent international body. "But in recent months they have been doing a lot of work on these aspects."

"They have quite a lot of equipment and resources available...up to a tier two or three level of response. I'm quite confident they will do something (about the lack of a formal contingency plan) in the coming weeks or months," Gonzalez said.

Offshore oil spills are divided into three categories, or tiers, said Gonzalez. A tier one incident is small and localized, such as minor spill from a ship within a port. A tier two spill is larger and on open water, but contained within the territorial waters of one country. A tier three spill is large and may affect the territorial waters of several countries and require international assistance, he said.

"If the oil spill is tier one it would be a small operational incident that BP can deal with quickly and locally," said BP spokesman Wine. "Tier two would need resources such as vessels and that would work with (Libya's National Oil Company), and we've contracted (with a base in) Al Jouf which has recovery equipment that can be sent out to the site of the spill."

"Tier three would be large and would involve Oil Spill Response," an industry-funded company that maintains the stockpile of spill handling equipment at locations all over the world, said Wine.

Oil Spill Response focuses on Europe, the Middle East and Asia.

For a spill in Libyan waters, Oil Spill Response could rapidly deploy equipment from its base in Southampton, said the company's duty manager Marcus Mussell.

"We have a lot of gear designed so it can be rapidly transported in our own aircraft. It would take a couple of hours to load then a four to five hour flight," Mussell said. Significant resources, such as pumps, boom, airborne dispersant systems and wildlife treatment centers could be on the ground within 24 hours, provided they could get flight clearance from the relevant authorities, he said.

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


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