BP abandons Great Australian Bight drill plans

[SYDNEY] British oil giant BP on Tuesday abandoned plans to drill in the Great Australian Bight after reviewing its global upstream strategy, a decision that environmentalists hailed as a victory.

The company had wanted to drill four deep exploration wells off the South Australian coast to see whether commercial quantities of oil or natural gas are present.

But its application has repeatedly hit hurdles at the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) for failing to meet strict environmental criteria.

Conservation groups have been opposed to exploration by resource companies including BP in the bight, saying it poses risks to the environment. BP was responsible for a massive oil spill in 2010 in the Gulf of Mexico.

BP's managing director for exploration and production in Australia, Claire Fitzpatrick, said the decision not to proceed followed a review of the company's upstream strategy earlier this year.

"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," she said in a statement.

"After extensive and careful consideration, this has proven not to be the case for our project to explore in the Bight."

The Wilderness Society said all oil and gas companies, including Chevron and Santos, should follow BP's lead and leave the Great Australian Bight.

The bight is a calving haven for the threatened southern right whale and an important foraging area for white sharks, migratory sperm whales and the Australian sea lion.

"If BP with all its experience cannot produce an acceptable drilling plan for NOPSEMA, the remaining companies exploring in the Bight will be wasting their shareholders' money trying to pursue this folly," said the Society's national director Lyndon Schneiders.

"The fact is that drilling here is far too dangerous for our environment and our communities and our Great Australian Bight needs to be permanently protected from the risks inherently associated with oil and gas exploration."

BP denied that regulatory hurdles impacted its decision.

"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," said Ms Fitzpatrick.

"It is an outcome of our strategy and the relative competitiveness of this project in our portfolio."

AFP