DEEPWATER: BP, Greenpeace & Australia Clowning Around?

Greenpeace labels BP's Australian exploration win a "sick joke"

By Christine Forster

Not surprisingly, environmental lobby group Greenpeace was quick to condemn this week's award to BP of four new petroleum exploration permits off Australia's southern coast, even going so far as to label the move "some kind of sick joke."

UK oil major BP is being singled out for its role presiding over last year's Macondo oil spill disaster in the Gulf of Mexico, particularly given the recent findings of the US Oil Spill Commission that the incident was the result of systemic industry problems and a "failure of management" by the companies involved. But Australian environmental groups are also particularly wary of offshore drilling after watching a well at the Montara field spill oil into the Timor Sea off Western Australia for 10 weeks in 2009.

"In the wake of the recent catastrophic spills, it is almost beyond belief that BP should be allowed to prospect for oil at depths over three times greater than the Gulf," Greenpeace Australia Pacific Head of Campaigns Stephen Campbell said in a statement on the lobby group's website.

"Deepsea drilling is risky," Campbell added. "It's time for Australia to invest in renewable technology, not to squeeze the last drops of oil from the deepest and darkest corners of the earth no matter the consequences."

BP's permits were among seven awarded January 17 from Australia's 2009 acreage release in Commonwealth waters and cover four exploration areas in the frontier Ceduna Sub-basin in the Bight Basin off the state of South Australia.

BP was awarded the permits following an extensive assessment and due diligence process that examined the company's technical and financial competence to undertake the proposed work program in accordance with Australia's "stringent" legislation, federal Resources and Energy Minister Martin Ferguson said. The permits also came with additional conditions emphasizing the need for oil field best practices by the operator, reinforcing BP's undertaking to fully integrate lessons learned from the US Gulf incident into its systems and processes, he added.

Ferguson said he was "satisfied that we have put in place the appropriate safeguards and note BP's commitment to work with government and regulators to ensure the highest possible safety standards as they carry out this [exploration] work."

In response, Greenpeace's Campbell suggested that "Australians should be asking themselves whether the minister responsible for Montara -- Australia's worst oil spill -- is playing some kind of sick joke by granting exploration licenses off our coastline to BP -- the company culpable for one of the greatest environmental disasters in history."

Meanwhile, the Humane Society International responded to the award of the permits by asking "what about the whales?" The exploration licenses are located in waters that are key feeding, breeding, and migratory sites for a number of threatened species, including the Southern Right whale, Humpback whale, Great White shark and Southern Bluefin tuna, according to HSI.

"It is astounding that the government claims to be making efforts to conserve our threatened whales whilst simultaneously approving projects that will directly impact upon their vital feeding and breeding areas," HSI's Alexia Wellbelove said in a statement.

BP is planning more than 11,400 sq km of 3D seismic surveying in the first two years of the permits' terms and four exploration wells in the third year, expected to be drilled in 2013 or 2014.

Source: http://www.platts.com/weblog/oilblog/2011/01/20/greenpeace_labe.html

NUTSHELL:

Greenpeace is famed for its vocal (to put it mildly) criticism of corporations which it deems to be contributing to environmental degradation. In its quest, unfortunately, BP has fallen in the eye of the storm. In 2007 Greenpeace closed down up to 50 BP fuel stations for ''moving beyond petroleum'' and since then there has been no let up. But what are the real issues? Green peace is concerned that BP with its ''notorious'' safety record may not be able to exploit the Australian Bight Basin safely and may even cause even more catastrophic devastation that the proportions witnessed at the Gulf of Mexico. 

BP is a going concern and must develop new business opportunities; for an oil and gas major this necessarily involves bidding for acreage. If you control the reserves- you set your business up for the dividends of responsive financial markets and other market share implications. In addition to passing the stringent requirements as set by Australian Federal Resources and Energy department, BP has been given extra conditions that it must meet in order to incorporate learnings from the Macondo incident into these new projects. Also within the context of diminishing onshore oil reserves worldwide, Deepwater drilling is serious business and BP has demonstrated its ability over time to exploit oil at great depths with minimal cost and relative efficiency. However, the sustainability of such a track record will be questioned by the likes of Greenpeace cost cutting has been identified as one of the major cause factors in the Macondo incident.

Within the context of management of stakeholders, Greenpeace must understand that in protecting the environment- as it claims, BP and other major big oil corporations are stakeholders which must be engaged proactively. The same goes for BP; in its quest for energy beyond petroleum, stakeholders such as Greenpeace must be appropriately engaged via corporate social responsibility initiatives. In summary, until both parties take steps to engage one another more seriously and constructively, there is every likelihood that the real parties clowning around are BP and Greenpeace.