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Shell Wins Approval for Deep Drilling in GoM

Source: Bloomberg 3/30/2011, Location: North America

Royal Dutch Shell Plc won a U.S. permit to drill a deep-water well in the Gulf of Mexico where exploration was banned after the BP Plc blowout 11 months ago.

Shell, based in The Hague, can drill in waters about 137 miles (220 kilometers) south of Lafayette, Louisiana, at a depth of 2,721 feet (829 meters), according to a statement today from the Bureau of Ocean Energy Management, Regulation and Enforcement. The Interior Department unit on March 21 approved Shell’s exploration plan for the Gulf.

The company must comply with “rigorous new safety standards” adopted after the April 20 blast on the Deepwater Horizon drilling rig, which killed 11 workers, ruptured the well and spilled 4.9 million barrels of crude into the Gulf. The Obama administration halted deep-water drilling after the blowout, a ban that was lifted in October.

“The completion of this process further demonstrates that we are proceeding as quickly as our resources allow to properly regulate offshore oil and gas operations in the most safe and environmentally-responsible manner,” Michael Bromwich, director of the bureau of ocean management, said in a statement.

Shell will drill in a section of the Gulf known as the Garden Banks, in block 427, the agency said.

Marine Well Containment Co., a group Shell set up with three partners, will provide equipment in case of a blowout, according to the exploration plan.

The regulator has allowed Noble Energy Inc. (NBL), Exxon Mobil Corp. (XOM), BHP Billiton Ltd. (BHP) and ATP Oil & Gas Corp. to resume work on wells that were suspended after BP’s April 20 spill. Chevron Corp. (CVX) on March 24 received the first U.S. permit for a new deep- water well since the moratorium was lifted, the agency said.

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