BP may not bid in next Gulf licensing round
BY SELINA WILLIAMS
LONDON--BP may decide not to bid for further oil drilling leases in the next licensing round in the Gulf of Mexico, scheduled for March, as the company already holds a large number of contracts in what it considers to be one of its most important regions, Chief Executive Bob Dudley said Tuesday.
"We didn't, as a matter of course, bid on the last round of leases in the Gulf and may not in the next one. We have such a large position in the Gulf of Mexico that it's questionable how much we want to add to that," Mr. Dudley told reporters.
BP is one of the biggest producers of oil and gas in the Gulf and one of its most active prospectors. The region is a priority for BP, which sees it as one of the main drivers of medium- and long-term growth for the company.
However in November, the U.S. government's Obama-led administration temporarily blocked BP from obtaining new contracts with the U.S. government, citing a "lack due of business integrity" that resulted in the Deepwater Horizon oil spill in April 2010.
The suspension prevents BP from acquiring new oil-drilling leases or other government contracts, such as supplying fuel to the U.S. military, until BP can prove it meets federal business standards, the Environmental Protection Agency said in November.
BP has been talking to the EPA, which imposed the temporary suspension in November, but said it could take some time to reach an administrative agreement with the agency on the issue.
The ban doesn't impact current operations and BP continues to receive the permits it requires to drill in the Gulf, where it already has around 700 licenses, Mr. Dudley said.
Regarding BP's contracts to supply fuel to the U.S. military, some of which have recently expired, Mr. Dudley said the margins were "wafer thin" and the loss "immaterial" to the company.
BP currently has seven rigs up and running in the Gulf, where it is drilling production and injection wells as well as an appraisal well on the giant Kaskida prospect, he said.
Dow Jones Newswires