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Gulf Oil Disaster
The New York Times, October 21, 2011

BP’s Plan for Drilling in the Gulf Is Approved
By Clifford Kraus

HOUSTON — The Obama administration on Friday took another step toward allowing BP to return to the Gulf of Mexico, approving the first oil drilling plan for the company there since the explosion that sank the Deepwater Horizon rig more than a year ago.

It was another sign that oil exploration in the gulf was coming back to normal, although energy companies continued to complain that the permitting process for drilling new wells remained far slower than before the accident.

The federal government’s approval of the BP plan to drill up to four exploratory wells nearly 200 miles from the Louisiana coast was positive news for BP, which has struggled to recover from the April 2010 accident that left 11 workers dead and spilled millions of barrels of oil into the gulf.

“Our review of BP’s plan included verification of BP’s compliance with the heightened standards that all deepwater activities must meet,” said Tommy P. Beaudreau, the director of the Bureau of Ocean Energy Management, in a statement announcing the decision.

The statement said that BP had voluntarily carried out “additional safety enhancements and performance standards” for exploring for oil and gas in the gulf.

A week earlier, the administration announced that the company would be allowed to bid on new oil leases in the gulf in a December lease auction, the first scheduled since the disaster. Michael R. Bromwich, the head of the Bureau of Safety and Environmental Enforcement, told a Congressional committee that the decision came after a comprehensive internal debate.

Mr. Bromwich’s agency will still need to grant BP permits before the company can drill the new wells, which are expected to be at a water depth of just over 6,000 feet. That process could take several weeks or more.

BP spokesmen declined to discuss the latest decision, although the company issued a brief statement saying that, “We are working through the regulatory process” and that the company’s voluntary standards “exceed current government requirements.”

The gulf accident remains a burden for the company. BP, along with Transocean, the rig operator, and Halliburton, the cement contractor, recently received citations from the Interior Department saying that they had failed to protect safety and the environment. The 15 separate violations could force the companies to pay as much as $45.7 million. They face potential criminal charges as well.

Representative Edward J. Markey of Massachusetts, the senior Democrat on the House Natural Resources Committee, was sharply critical of the drilling approval.

“Comprehensive safety legislation hasn’t passed Congress, and BP hasn’t paid the fines they owe for their spill, yet BP is being given back the keys to drill in the gulf,” Mr. Markey said in a statement.

BP continues to pump oil and gas in the gulf from production platforms, and it has a minority stake in another well being drilled by Noble Energy that was approved after the Deepwater Horizon accident.

While the company’s operations may be returning to normal in the United States, its business in Russia continues to be plagued by turmoil.

Tensions at its TNK-BP joint venture led to the departure Friday of Maxim Barsky, the Russian deputy chief executive and heir apparent to the chief executive, Mikhail Fridman. It was the latest episode in a continuing corporate shake-up resulting in part from a dispute over a BP move to partner with a second Russian company, Rosneft, earlier this year.

TNK-BP blocked the Rosneft venture in court, and minority shareholders of TNK-BP have sued BP seeking billions of dollars in damages.

Mr. Fridman, who has a history of conflict with senior BP executives, will remain as chief executive of TNK-BP until the end of 2013, the companies said Friday.

© 2011 The New York Times Company

This article originally appeared here.

Photo © Paul S. Hamilton