Shell and BP remain committed to deep-sea wells

We provide extracts from two news reports which show that the two largest British oil and gas companies, Shell and British Petroleum, remain committed to a future which involves extraction of oil and gas from deep-sea wells.

The Guardian reports, 11th September 2016: Royal Dutch Shell has started production at the world’s deepest underwater oil and gas field, 1.8 miles beneath the sea surface in the Gulf of Mexico.

The first oil pumped from the Stones field, 200 miles south of New Orleans, comes after billions of dollars of investment from Shell over the last three years.

The field is in much deeper water than the Macondo prospect, where six years ago BP’s Deepwater Horizon rig exploded and sank, killing 11 workers and causing environmental disaster.

Faced with low oil prices and increased pressure from climate change activists, Shell has retreated from some of its most expensive production projects. In the autumn last year, it ditched drilling operations in the Alaskan Arctic and abandoned a tar sands project in Alberta, Canada.

But the group has told shareholders it will continue spending heavily on pioneering deep water projects, which will provide a major source of future growth. Announcing production had begun at Stones, Shell said: “Our growing expertise in using such technologies in innovative ways will help us unlock more deep water resources around the world.”

Shell has forecast that its deep water production will increase to the equivalent of more than 900,000 barrels of oil a day by the early 2020s from already discovered, established reservoirs. Major projects the group is working on include Coulomb Phase 2 and Appomattox in the Gulf of Mexico and Malikai off the coast of Malaysia.

Shell began the costly Stones project in 2013, two years after the International Energy Agency (IEA) warned that two-thirds of proven fossil fuel reserves will need to remain in the ground to prevent the earth from warming 2°C above pre-industrial levels — a proposed temperature limit beyond which scientists warn of spiralling and irreversible climate change.

Source: The Guardian, 11th September 2015. For the full details, see

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The Guardian reports, 12th September 2016: You wouldn’t ride a roller coaster if you weren’t certain that all the bolts were sound. Yet, as reported in the Guardian, that’s just the risk being being taken with an oil-rig headed for the Great Australian Bight.

Oil and gas multinational BP plans to drill in the near pristine waters of the Great Australian Bight, posing a terrible hazard to the future of the state. Now is the time to stop this threat before the fossil fuel industry takes hold.

BP wants to drill the Bight at depths even deeper than the Deep Water Horizon rig in the Gulf of Mexico. That’s the same Deepwater Horizon that exploded in April 2010, killing 11 people and causing catastrophic damage to local communities and wildlife as the oil gushed out uncontrolled for almost three months.

Talking to people in South Australia this week, the concern is palpable. Looking out on the cold fresh waters of Encounter Bay, the seaside community of Victor Harbour is located around an hour’s drive south of Adelaide. The town’s way of life and economy revolve around the ocean.

Victor Harbour’s city council is evidently worried about the threat posed by BP’s plans. In his official submission to the Australian Senate, City of Victor Harbour CEO Graeme Maxwell warned that BP’s drilling plans represented a high risk to both the values and economy of the coastal community.

BP are keeping their own modelling secret, but analysis of oil spill trajectories in the Great Australian Bight commissioned by the Wilderness Society shows the impact not only extending across South Australia but to Victoria and Tasmania.

Even if there is no catastrophic oil spill, South Australia and the world can’t afford the opening of new fossil fuel extraction if we are to have a chance of keeping global warming to the international target of no more than 1.5 degrees.

Adding fiscal insult to environmental injury, it has been reported that BP may be able to deduct 150% of its planned $1bn Great Australian Bight deep-water drilling program from tax and royalty payments. The few immediate jobs that may eventuate are paltry compared to all that is at risk.

BP hopes to begin exploratory drilling as early as the end of 2016. If the oil is there — and BP is confident that it is — then other oil and gas multinationals will likely join the rush.

South Australia faces a clear choice. In Victor Harbour one of the locals is particularly frank with me: “One mistake and the whole lot’s buggered,” he says.

Source: The Guardian, 12th September 2016. For the full details, see

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