BP calls it quits on Great Australian Bight drilling project

British oil giant BP has decided to abandon its proposed drilling program in the Great Australian Bight (GAB), offshore South Australia.

BP was awarded exploration licenses for four blocks in the Ceduna area of the GAB in January 2011. Statoil acquired a 30% interest in the licenses in 2013, BP remained operator with 70% interest.

The project has been under fire by the environmentalist groups, such as Greenpeace and Australian Greens, who have said that it is a disaster waiting to happen, considering the area is a marine park.

Announcing its decision to abandon the project, BP said that the decision “follows the review and refresh of BP’s upstream strategy earlier this year, which included focusing exploration on opportunities likely to create value in the near to medium term, primarily building on BP’s significant existing upstream positions”.

In its announcement on Tuesday, the company did not say a word on the public pressure. The environmentalists have said that that drilling in the area containing a marine park would threaten marine life, fisheries, and eco-tourism operators. The Green Party has said it will propose a bill to the Senate that would see the Great Australian Bight marine park “protected from companies wanting to drill for oil and gas”.

“We have looked long and hard at our exploration plans for the Great Australian Bight but, in the current external environment, we will only pursue frontier exploration opportunities if they are competitive and aligned to our strategic goals. After extensive and careful consideration, this has proven not to be the case for our project to explore in the Bight,” said Claire Fitzpatrick, BP’s Managing Director for Exploration and Production, Australia.

“This decision isn’t a result of a change in our view of the prospectivity of the region, nor of the ongoing regulatory process run by the independent regulator NOPSEMA. It is an outcome of our strategy and the relative competitiveness of this project in our portfolio.”

BP had proposed to drill four wells in the area, however, that drilling program was rejected by the regulatory body NOPSEMA. BP then submitted another drilling program, proposing two wells. The final decision for the two well program has been postponed by NOPSEMA, which has asked for more information from BP regarding the proposed program.

Regarding BP’s move to abandon the proposed exploration program, NOPSEMA said it was aware of the announcement by BP, adding that NOPSEMA has made no further notification to BP following a request for information issued on September 28, in relation to their environment plan for the drilling of the Whinham-1 and Stromlo-1 wells.

The environment plans submitted by BP for drilling in the Great Australian Bight remain under assessment by NOPSEMA, the organization said, adding that this assessment process will proceed until the environment plans are withdrawn by BP. NOPSEMA has not received a withdrawal request, the government body said.

“To date NOPSEMA has had productive dialogue with BP and other stakeholders, including community interests such as fisheries and environmental groups. NOPSEMA will continue to engage with industry, other interested stakeholders, and the wider community. Questions regarding the plans of other companies holding titles in the Great Australian Bight should be directed to the specific companies,” NOPSEMA said.

BP has a contract with Diamond Offshore Drilling for the provision of a new Moss CS60E design semi-submersible drilling rig, which Diamond commissioned Hyundai Heavy Industries to build and is specially designed for use in deep water and harsh marine environments.

BP and Diamond Offshore confirmed on Tuesday that BP’s decision to abandon the Great Australian Bight drilling program does not impact the rig’s contract.

Offshore Energy Today Staff