Gulf of Mexico: BP’s small spend with big significance
Mere days after the US lifted a ban on BP bidding for new drilling licences, the oil giant has won 24 out of 31 bids in the Gulf of Mexico.
The Environmental Protection Agency had forbidden BP from bidding for new federal contracts after the infamous 2010 Gulf of Mexico oil spill, which was the biggest oil disaster in US history, killing 11 people.
But in terms of expenditure, this is not significant news for BP – it is spending around $41m (£25m) on the licences it has won, which for a company targeting $24bn capex this year is teeny tiny. And in terms of exploration, BP is already active in the Gulf through its existing licences.
“It’s a very small amount of BP’s overall business,” oil and gas analyst Malcolm Graham-Wood told City A.M.
“It’s not a lot of money but the most important thing is that it’s the first auction they’ve been allowed to participate in, and they’ve won 24 out of 31 licences.”
This might not have excited the market – BP’s share price closed over 1.5 per cent lower today – but the company’s return to the Gulf auctions must surely be a sign that it is starting to bounce back from the Deepwater Horizon disaster.
“As the nation’s largest energy investor, BP is committed to the deepwater Gulf of Mexico, where we have been an active player for a quarter century and have a multi-billion dollar investment program underway,” said a BP spokesperson.
“BP’s participation in today’s lease sale not only underscores the importance of the region, but it is also a testament to the vital role BP plays in the American economy and to the country’s energy future.”