RETURN TO THE GULF
Yesterday's first auction of deep-water blocks since BP's Deepwater Horizon oil spill brought in a total of $337.6 million of winning bids to the federal government. Twenty leading oil and gas companies competed for shares of some 21 million acres of federal waters, stretching hundreds of miles of the Texas coast.
Winning the highest number of bids, ConocoPhillips received 75 leases for $157.8 million, according to the Interior Bureau of Ocean Energy Management. BP will also officially recommence its operations in the Gulf, winning 11 out of the 15 bids the company threw an upwards of $110 million at.
BP has made its intentions of reentering deepwater exploration in the area well known over the past few months. Environmentalists feel the company should have been excluded from purchasing leases until last year's spill is fully cleaned up at the very least.
However, former Bureau of Safety and Environmental Enforcement Director Michael Bromwich defends BP's involvement.
“They don’t have a deeply flawed record offshore,” he said of BP. “We’ve done analyses over time on the relative safety records of offshore operators and they were in close to the top crew.”
“The question is, do you administer the administrative death penalty based on one incident?," Bromwich told reporters. “And we've concluded, I’ve concluded, that's not appropriate in these circumstances."
SEE OTHER TOP STORIES IN THE ENERGY DIGITAL CONTENT NETWORK
At the same time the federal government reopens the gulf for business, an independent report by the National Academy of Engineering and the National Research Council was released, revealing the lack of safety precautions the oil industry had taken in the years leading up to the 2010 Gulf of Mexico spill.
"There were numerous warnings to both industry and regulators about potential failures of existing BOP [blowout preventer] systems," the report said. It also called for the redesigning of a massive set of valves, rams and hydraulic devices that were once thought to be fail-safe.
In the wake of a revival of deep offshore oil drilling, safety will be a heated and central topic over the next year. BP says it will take action to increase safety measures in the gulf after the probe of the 2010 disaster. Too soon?