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First Deepwater Drilling Permit Since BP Spill Goes to ... a Well Co-Owned by BP

Offshore drilling regulators this week approved the first deepwater drilling permit since BP’s Deepwater Horizon disaster, and as many have pointed out, it’s going to a well owned and operated by Noble Energy.

But here’s a lesser-noticed fact, which Reuters reported today: BP co-owns the well—46.5 percent of it, to be exact. The Bureau of Ocean Energy Management, the revamped offshore drilling agency, made no mention of BP’s ownership of the well in its press release, which touted the newly approved permit as a “an important step towards safely developing deepwater energy supplies offshore.”

(BP confirmed with us its stake in the well, but referred further questions about its involvement in operating the well and its expected revenue to Noble Energy.)

Regulators had asked oil companies to prove their ability to contain oil spills occurring in deep water before granting any more permits for deepwater drilling, and two systems have been proposed—one by a company called Helix Energy Solutions and another by the Marine Well Containment Company, a group of oil companies led by Exxon. Just last month, Bromwich said that neither system was ready yet and allowing deepwater drilling would be "simply irresponsible." He stated this week that Noble—which has a contract with Helix—"is capable of containing a subsea blowout."

“This permit was issued for one simple reason: the operator successfully demonstrated that it can drill its deepwater well safely and that it is capable of containing a subsea blowout if it were to occur,” said agency chief Michael Bromwich. He said the agency expects more deepwater permits to be approved in the "coming weeks and months."

Gulf lawmakers and industry leaders welcomed news of the approved deepwater permit and called on regulators to move more quickly with their approvals, reported the Houston Chronicle.

What’s still unclear is whether regulators are adequately prepared to do so. Last month, the Government Accountability Office, the federal government’s internal watchdog, identified “significant problems with Interior’s management of federal oil and gas resources” and designated it a “high-risk” area.

Another GAO report released today suggests that the Interior Department still faces ongoing problems with royalty collection and inadequate staffing. It expressed concerns—given the recent reorganization within the department—about whether the department can adequately balance oil and gas development with environmental stewardship. As we've noted and as the BP disaster revealed, they've not done this so well in the past.

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