More and more reports are coming in about delays to oil drilling projects as a result of the Deepwater Horizon accident and continuing oil leak. There is a temporary moratorium on new drilling permits, and a suspension of hearings on Virginia’s offshore development.
Some very high-profile projects could be among those affected, including BP’s own, newfound, ultra-deepwater discovery.
Shell has already had several setbacks and delays in its plans to begin drilling off Alaska’s north coast, mostly due to environmental concerns.
As the FT reports, it had fought 10 court cases over the past four years, and on April 1 was granted a final air-quality permit to begin drilling off the coast:
But the April 20 explosion on the
BP-contracted rig in the Gulf of Mexico and subsequent oil leak has led the Obama administration to ask Shell to explain by May 18 how it would modify its plans to ensure against such an incident in Alaska.
The delay is somewhat ironic as Shell’s project was seen as being a test for how well the industry could allay concerns about drilling in Alaskan waters, a sensitive issue both for environmental reasons and because of the fishing induistry.
Meanwhile ConocoPhillips, a partner on BP’s much-feted giant 2009 discovery, Tiber, says appraisal work will be delayed due to the spill. From Bloomberg:
ConocoPhillips, which commented on possible effects of the spill today in a presentation at its annual shareholders’ meeting, didn’t say how long appraisal work at Tiber may be delayed.
BP wasn’t immediately able to comment on the appraisal schedule, but Bloomberg adds:
At least two drilling rigs that could have been used for Tiber will be tied up drilling relief wells to stanch the flow of crude at Macondo, said Brian Uhlmer, an analyst at Pritchard Capital in Houston.
Much of the focus on the fallout from the accident has been on big picture changes to policy. But the IEA said on Wednesday that the oil leak could have some substantial short-term effects, too:
Firstly, a wider spread of the oil slick could for safety reasons force a halt to activities
on oil platforms, as well as hamper shipping, including ship‐based crude imports to coastal refineries. Investigations into the cause of the accident have begun and the debate over the allocation of responsibility and adequacy of safety measures is already underway. More intrusive security checks, or potential retrofits of safety equipment, if required, could hamper production in the medium term, and raise costs accordingly, but might be necessary for companies to gain access to new acreage.