BP’s plans to drill for oil in the Great Australian Bight are dead once and for all

BP has formally withdrawn its application to drill for oil in the Great Australian Bight, putting to be any speculation its joint venture party or another company might take up the project.

The sun has set on BP’s plans to drill in the Great Australian Bight.

• Why BP pulled out of the Bight project
• Koutsantonis demands compensation from BP
• Chevron says Bight oil drilling is still years away

BP has formally withdrawn its application to drill for oil in the Great Australian Bight, putting to bed any speculation its joint venture party or another company might take up the project.

BP lodged its withdrawal with the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) on December 20, bringing to a close a five-year approvals process.

BP had already confirmed in October that it had abandoned plans to spend up to $1.4 billion drilling for oil in the Bight, but with the application still current another company could have come into the project.

BP’s joint venture partner Statoil could have taken over the project, but indicated in October that was unlikely.

“We will work constructively with BP and relevant authorities to resolve the issues arising from BP’s decision, and we will take the time necessary to do this in a systematic manner,” a Statoil spokesperson said.

“However, we are not ready to take on the commitments of BP necessary to proceed with the exploration program as planned.”

BP had guaranteed to undertake exploration worth about $605 million and drill four exploration wells in 2016-17. Another $832 million in expenditure was not guaranteed.

South Australian Treasurer Tom Koutsantonis has demanded that BP pay compensation for pulling out of the project, which would have generated significant investment.

“The people of South Australia were expecting this investment. We were the ones who were going to have to put up with the environmental risks,” he said in October.

“If they want to remain in good standing, that money should be spent in the Cooper Basin, the Otway Basin, to improve the country’s domestic gas market or oil market.

“The reputational damage BP has done to itself is immense. If you’re any developed country anywhere in the world, how can you believe anything BP says ever again?”

Federal Resources Minister Matt Canavan said at the time he was “very interested to speak with BP about the future opportunities in SA” but he was unwilling to provide any further certainty to the state about the level of investment it should expect.

BP is likely to have a commitment to make good on some of the investment it had promised, under a “Good Standing Agreement” contained in the original deal to grant it the GAB tenements.

No statements have yet been made about what those might be.

Wilderness Society South Australia Director Peter Owen said the withdrawal was an early Christmas present for SA.

“BP’s decision to finally withdraw its risky plans for the Bight has given Australians something to really celebrate this Christmas,” he said.

“If BP with all its experience could not produce an acceptable drilling plan for the regulator NOPSEMA, the remaining companies exploring in the Bight will be wasting their shareholders’ money trying to pursue this folly.

“Chevron, Santos, Murphy and Karoon will face the same massive costs and increasing community opposition that BP experienced. We call on these companies to follow BP’s lead and leave the Bight and the communities surrounding the Bight in peace.

“The Australian Government should now recognise that deepwater exploration drilling cannot be undertaken safely in the rough waters of the Great Australian Bight. It should step in and terminate BP’s leases and rescind all exploration permits in the Bight Basin.’’

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