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BP America's McKay: No Timetable on Return to Deepwater

The Gulf of Mexico (GOM) is "indispensable to the world's energy future," but BP plc has no timetable about when it may be returning to the deepwater, a top executive said Tuesday.

BP America President Lamar McKay spoke to delegates and then to reporters at the Offshore Technology Conference (OTC) in Houston and retreated from comments made last week by CFO Byron Grote, who asserted that the company would be "actively drilling" in the GOM in the second half of this year (see Daily GPI, April 28).

"The Gulf of Mexico is very important to us," McKay told reporters. "It's something that we plan on building upon. It's important to stay in the Gulf of Mexico and operate the projects we have. We intend on meeting all the regulatory requirements and getting back to work with industry when it is appropriate in the eyes of the regulator," the Bureau of Ocean Energy Management, Enforcement and Regulation (BOEM).

BP has submitted permits to drill in the deepwater and is awaiting approval to proceed. It is a partner on at least one of the permits already approved. However, McKay refused to assume that BP would be the operating partner on a deepwater project before the end of this year.

"It's a constructive engagement, solely based on making sure we ourselves know that we've got the capability and the right things to get back to work...and the regulator agrees with that," he said. "When they agree with that and we're ready to go, we'll go."

How much time? The BP chief said he couldn't put a date on it.

"I don't have a time prediction," McKay said when pressed by reporters. "It's as soon as the regulator feels we have met those requirements."

Since the Macondo well blowout and subsequent oil spill disaster, BP has been reevaluating "our relationship and our contracts, and our future with those contractors," McKay said. "Multiple causes and multiple parties" were involved in the oil spill, which already have cost BP billions of dollars in assets and in costs to repair the spill damage. It faces still more costs in fines and legal proceedings (see related story).

A well worn phrase at this year's OTC proceedings is a variation of "lessons learned" from last year's oil spill, and those words are being taken to heart at BP, said McKay. For instance, third-party verification has been adopted for offshore equipment, like blowout preventers and remote operating vehicles, which confirms that the equipment works as intended in the case of an emergency. Oversight of offshore well cementing work also has been enhanced.

In addition, BP is participating in an industrywide group that operates in the UK's North Sea to build a next-generation device to cap runaway wells.

"While we definitely have lessons to learn, we also must face resolutely forward," McKay said.

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