BHP Billiton wins nod for deep-water drilling in US

BHP Billiton Ltd won the second US deep-water permit to drill in the Gulf of Mexico since BP Plc’s oil spill last year, after lawmakers criticised the Obama administration for delaying domestic exploration.

BHP will be able to resume work halted after BP’s disaster on April 20. The Melbourne-based company, Australia’s biggest oil and gas producer, will use equipment from Helix Energy Solutions Group Inc in case of a blowout, Melissa Schwartz, a spokeswoman for the Bureau of Ocean Energy Management, Regulation and Enforcement, said yesterday.

Noble Energy Inc won the first deep-water drilling permit in the Gulf on February 28. Rising oil prices following political unrest in North Africa and West Asia intensified calls from Republicans in Congress and oil companies to let energy producers resume work in the region.

“We are encouraging offshore exploration and production,” President Barack Obama said during a press conference at the White House yesterday. “We’re just doing it responsibly.”

Crude oil in New York has climbed 23 per cent in the past year. Futures have surged 11 per cent since January 14, when the President of Tunisia was ousted, as protests rocked West Asia and North Africa, including Saudi Arabia’s neighbours Yemen, Oman and Bahrain. Prices touched a 29-month high of $106.95 a barrel in during trading on March 7.

Helix, which provided vessels that responded to the BP disaster, is able to collect 10,000 barrels of oil a day and cap a well in water as deep as 5,600 feet (1,706 meters), Cameron Wallace, a Helix spokesman, said at the time Noble won its permit.

“This second permit approval is another example of regulators and industry working together to restore domestic energy production in the Gulf of Mexico in a responsible manner,” Wallace said in a statement yesterday.

Oil production in federal waters of the Gulf, the largest domestic source of US crude, reached a record high in 2010, Obama said yesterday. The administration had stopped deep-water drilling after the BP blow out to assess safety and spill- response plans of the companies. The moratorium was lifted on October 12.

Producing oil is a time-consuming process and the administration should issue more permits and open new areas for energy exploration, Erik Milito, director of upstream and industry operations at the American Petroleum Institute, a Washington-based trade association, said during a conference call with reporters yesterday.