MELBOURNE, Australia--Norway's state-owned oil giant Statoil ASA (STL.OS) has revived plans dropped by BP PLC (BP.LN) to drill deepwater wells in a search for oil off Australia's southern coast, an area of wild seas that environmental groups want to see protected from exploration.
In a swap of exploration rights over claims in the Great Australian Bight, Statoil said it had strengthened its position in an unproven but promising basin. The deal with BP has the approval of Australia's National Offshore Petroleum Titles Administrator and comes with an extension on approval to drill one exploration well by late 2019.
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Last October, BP gave up on plans to drill wells in the Bight, saying the projects didn't stack up financially against other opportunities globally.
That came after oil and natural-gas regulators sought more information from the company on how it intended to manage environmental risk in a remote stretch of ocean that is home to whales, sea lions and other wildlife. Environmental organizations has said a deep-sea well blowout could put endangered animals at risk, and claimed BP's emergency-response plans weren't sufficient.
Statoil said it had swapped its minority 30% stakes in two offshore exploration permits for BP's 70% equity interests in two other permits, including the EPP39 permit that contains the proposed Stromlo well. In December, BP withdrew its environmental plan submissions for the Stromlo and Whinham wells
Paal Haremo, vice president of exploration in Australasia at Statoil, in a statement said the Scandinavian company was pleased to have found a way forward for its exploration project in the Bight. He said Statoil had already mapped a number of prospects in its licence area, including the candidate Stromlo well.
"We have a good understanding of the geology in our licence area, based on high-quality 3D data analysis," he said, adding the company would now prepare for drilling, building on the previous work to redevelop plans.
It will be up to Australian regulatory authorities to grant the necessary approvals for activity to go ahead.
Greenpeace said Statoil's intention to drill would face intense opposition, and said regulators shouldn't approve its plans in what is an environmentally sensitive area.
"The Great Australian Bight has some of the most extreme weather conditions on the planet. Extreme deepwater drilling under such conditions is too risky," Greenpeace campaigner Jonathan Moylan said.
Stretching about 1,000 miles between the states of South Australia and Western Australia, the Bight is a marine reserve whose rich fishing grounds yield tuna and other prize species, as well as fearsome Great White sharks popular with thrill-seeking tourists who view them from the safety of diving cages.
Other oil companies have sought to explore in the region, including Chevron Corp. (CVX) which bought two deep-water exploration permits in the Bight in October 2013.
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(END) Dow Jones Newswires
June 09, 2017 02:40 ET (06:40 GMT)