Tag: Offshore drilling

Kiran Stacey

Many thanks for all your questions for Amrita Sen, oil analyst at BarCap. Her answers will appear on this site on Friday, April 8th.

Next week, the person in the hotseat will be Michael Bromwich, director of the US oceans regulator, the Bureau of Ocean Energy Management, Regulation and Enforcement.

Bromwich is the person in charge of deciding who gets to drill where in the sea off the US, and one year on from the BP oil spill, this is your chance to quiz him on everything from who should be able to drill in the Gulf of Mexico to what can be done to prevent another major spill.

Email all your questions to energysource@ft.com by Monday, April 11th.

Ensco, the UK energy company, said on Monday that it would buy Pride International, in a $7.3bn cash and stock deal that would create the world’s second-largest offshore driller by number of customers.

Ensco will pay $41.60 a share for Pride. The deal represents a 21 per cent premium to Pride’s closing price on Friday and comes as the drilling industry has been under pressure in the wake of the BP oil spill in the Gulf of Mexico last year.

Shareholders in the Texas-based Pride will receive 0.4778 newly-issued shares of Ensco plus $15.60 in cash for each share of Pride common stock. Pride shareholders will receive a total of $2.8bn in cash.

Kiran Stacey

A total of 144 new licences have been granted to explore oil and gas off the UK coast today. But the industry isn’t happy – 99 have been held back for further assessments on the likely ecological impact.

Oil & Gas UK said:

We note with concern that a further 99 blocks have been held back, awaiting the results of environmental assessments being carried out by the Department of Energy and Climate Change (DECC).  We would urge the government to conclude this process as quickly as possible to allow prospective licensees to move ahead swiftly with investment in new exploration activity.

Is this the first evidence that the BP spill is going to make governments across the world more wary before awarding such licences in future, even for other reasons than safety concerns?

Kiran Stacey

A slightly confusing report has just dropped into my inbox from the German consultancy EnergyComment. It carries the provocative title Offshore oil drilling: Public costs and risks are too high and states (underlining the author’s own):

A ban on all new offshore oil drilling is justified as the risks are too high relative to the rewards.

This is considerably more hardline than the current position even of the US government, which has implemented a six-month ban on new deepwater drilling (in this case, drilling at depths of over 500ft).

But when I look for the justification for such an assertion, it is difficult to find. Much of the report focuses on the problems that come with depth, rleaving out shallower drilling altogether. It also seems to set a high bar on what is a “justified risk”. Here’s a sample argument:

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« AugDecember 2014