Australian gov't gives BP permission for new oil exploration in South Australia

14:06, January 17, 2011      

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Australian federal government on Monday gave global oil and gas company BP permission to explore for new oil reserves off the Australian coast for the first time since the Gulf of Mexico spill disaster.

Resources Minister Martin Ferguson announced seven new oil and gas exploration permits to four companies to operate in Western Australia state and South Australia, in a 682 million U.S. dollars investment boost over the next three years.

Four permits were handed to BP Exploration (Alpha) in the Ceduna basin off South Australia.

The remaining three, in the Carnarvon Basin off Western Australia, were awarded to Woodside Energy, Riverina Energy and Finder No.4 Pty Ltd.

Ferguson said that the nation's energy security will be greatly enhanced by opening up new geological frontiers and reducing our dependence on imports.

The permits were the first in these areas to be issued since the April 2010 blowout at BP's Macondo well that killed 11 workers and spewed almost five million barrels of oil into the Gulf of Mexico.

According to Ferguson, the permits were not the first to be awarded to BP since the spill; Norway had already granted exploration rights to the BP company. He said the permits followed an extensive assessment that examined four company's ability to undertake the work in accordance with Australia's stringent requirements.

Additional conditions have also been attached to the permits to ensure best practice, he said.

"BP has accepted those conditions," Ferguson told reporters in Canberra on Monday.

Meanwhile, BP said it planned to commence seismic surveying later this year. Drilling would not take place until 2013 at the earliest.

"The Ceduna Sub-basin is a very exciting new exploration area for BP," Phil Home, managing director of BP's Australian upstream oil and gas business told Australia Associated Press on Monday. " Our experience tells us that the geology has a high potential for containing hydrocarbons."

South Australia's Minister for Mineral Resources Development Paul Holloway said the permits created the potential for almost 1. 5 billion U.S. dollars in spending on the search for petroleum.

"This area possibly contains large oil and gas accumulations, which if discovered, would significantly increase energy security locally and nationally," Holloway said.

Source: Xinhua

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