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Oil executives close ranks behind BP

Say drilling ban will be step back for energy security

BP’s Steve Westwell said that although regulations will change, energy from deep-water production is needed. BP’s Steve Westwell said that although regulations will change, energy from deep-water production is needed.
By Jane Wardell and Jennifer Quinn
Associated Press / June 23, 2010

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LONDON — After weeks of suffering the ire of the White House over the Louisiana rig spill, the oil industry is fighting back.

Rallying around beleaguered BP at a major oil conference yesterday, industry leaders pressed President Obama to lift the six-month ban on deepwater drilling he ordered after the gulf oil spill. Deepwater drilling is expensive, risky, and largely uncharted, but the industry contends that it is necessary in a world where land and shallow-water oil supplies are running out.

Jay Pryor, Chevron’s global vice president for business development, told delegates at the World National Oil Companies Congress in London that the moratorium will “constrain supplies for world energy’’ and “be a step back for energy security.’’

Obama’s decision halted the approval of any new permits for deepwater drilling and suspended drilling at 33 existing exploratory wells in the gulf. A federal judge in New Orleans blocked the moratorium yesterday, but Interior Secretary Ken Salazar said he will issue a new order imposing a moratorium that will contain information that makes it clear why the six-month drilling pause is necessary.

Steve Westwell, BP chief of staff, standing in for the embattled chief executive, Tony Hayward, said that although regulations will change as a result of his company’s blown well in the Gulf of Mexico, “The world does need the oil and the energy that is going to have to come from deep-water production going forward.’’

Westwell was interrupted twice during his address by protesters from Greenpeace who shouted, “We need to end the oil age!’’

The hecklers were escorted out of the heavily policed central London hotel by security, which also barred a news photographer from reentering the conference. Organizers said he was a security threat after he talked with protesters.

BP’s stock slid to a 13-year-low yesterday in London, and the oil giant confirmed that Hayward was in the process of handing over control of the oil spill, the worst offshore in US history, to the managing director, Bob Dudley.

The owner of the rig that exploded on April 20, setting off the oil leak and killing 11 workers, said the deep-water drilling ban is an overreaction.

“There are things the administration could implement today that would allow the industry to go back to work tomorrow without an arbitrary six-month time limit,’’ Steven Newman, Transocean Ltd. president and chief executive, told reporters. “Obviously, we are concerned.’’

In addition to in the gulf, there are more than 20 offshore rigs in Britain’s North Sea, although they do not operate in waters as deep. Brazil, which sits on the world’s potentially largest deep-water oil beds, has no deep-water rigs yet but plans to build 28.

Hayward skipped the London conference after he received stinging criticism for watching his yacht compete Saturday off England’s Isle of Wight. That outing drew outrage on the Gulf Coast and an acerbic response from the White House.

Pryor, when asked whether Chevron would have been as reckless, said no oil company can reduce the risk to zero.

“There’s always going to be that one chance in 10 million there’s an accident. Just like the nuclear and airline industries,’’ he said.

The blown-out BP undersea well has leaked more than 120 million gallons of oil into the gulf, according to the most pessimistic US government estimates. Oil has been washing up from Louisiana to Florida, killing birds and fish and coating marshes, wetlands, and beaches. A pair of relief wells considered the best chance at a permanent fix will not be completed until August.

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