Oct 26, 2010 11:14 AM by Posted by Sharlee Barriere
LONDON (AP) - Leading oil and gas companies warned British lawmakers Tuesday that any U.K. moratorium on deepwater drilling in response to the Gulf of Mexico spill would force them to abandon the North Sea in favor of projects elsewhere.
Executives from Chevron Corp., France's Total and Danish state-controlled DONG Energy told a parliamentary committee that their industry would likely pull out of Britain if there was a lengthy halt to exploration and production - leaving the country increasingly dependent on imported energy.
All three companies also insisted that Britain's tighter safety standards make the chance of a major spill in the waters off the Scottish coast less likely, and repeated their criticisms of BP over the spill.
British legislators are investigating the safety implications of the Gulf of Mexico spill and considering whether the U.K. government was correct in deciding not to put in place a moratorium on new deepwater drilling in the North Sea.
An explosion at BP's Macondo well on April 20 which killed 11 workers and triggered the massive oil spill has led to a review of standards on safety across the industry.
"I can guarantee you that here, safety is concern number one," Roland Festor, managing director of Total Exploration and Production U.K., told the Energy and Climate Change Committee. He said Britain's safety regulator, the Health and Safety Executive, "is not making our life easy, but has my big support."
Festor said any moratorium on deepwater would lead energy companies to move equipment and experienced staff away from the North Sea to projects in other regions. "For me, the most important thing is to keep the know-how in the country," he said.
Britain's Conservative-led government has so far rejected a halt on drilling, despite fierce criticism from environmental groups. Greenpeace says it is necessary to address major safety concerns, including a rise in accidental leaks and serious injuries to workers on offshore platforms.
Earlier this month, Britain granted Chevron Corp. permission to begin the first new deepwater drilling in the North Sea since the Macondo spill. It has begun drilling an exploratory well in its remote Lagavulin prospect, about 160 miles (258km) north of the Shetland isles off the Scottish coast.
Richard Cohagan, managing director of Chevron U.K., said it wouldn't be possible to continue operations in Britain if a moratorium was put in place and that staff would have to be relocated.
"If they can't drill here, it would be necessary to find some place in the world for them to do so," he told lawmakers.
Last month, BP's then-outgoing CEO Tony Hayward told a hearing with the panel that he believed deepwater drilling was safe - despite the U.S. spill - and would be necessary to meet demand for oil and gas.
Festor said on Tuesday that rivals have questioned the well design that BP used in the Gulf of Mexico, and believe they would be less likely to suffer a similar incident.
"We would not have used the type of cement that BP used. It has been quite a surprise that they used this type of nitrogen foam cement," he told lawmakers.
Cohagan and Brent Cheshire, managing director of DONG Energy's exploration and production unit, insisted they would have also installed different kinds of wells.
The committee will issue a series of recommendations on safety, likely before the end of the year, but has no powers to compel Britain's Conservative-led government to accept its findings.