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BP Gets Approval for South China Sea Exploration

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The Ministry of Commerce, People’s Republic of China, has granted consent to British Petroleum (BP), for an exploration drilling in the South China Sea in partnership with CNOOC, China Daily reveals today.

BP and the block operator CNOOC signed a deal for the exploration at the 43/11 deepwater block in South China Sea in January last year, but the agreement was subject to the Government’s approval.

This is BP’s second project in the deep waters of South China Sea after it had bought a stake in the Block 42/05 from Devon Energy China Ltd., in September 2010.

China daily reports that the partners in the project plan to use China’s first and only home made deepwater semi-submersible drilling rig Offshore Oil 981.

Asked when the exploration drilling would begin, BP China President Chen Liming told Reuters: “When we start depends on many factors, such as whether the drilling rig is ready. We hope to start drilling there by the end of the year.”

BP has been operating in China since the early 1970s and has business activities which include offshore gas production, chemical joint ventures, LPG import and marketing, oil product and lubricant retailing, chemicals joint ventures manufacturing ,technology licensing etc. According to China Daily, the British oil giant has so far invested more than USD 5 billion into China.

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Louisiana Energy Leader Describes Obama Administration as Hostile

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By Kevin Mooney

Louisiana’s strategic importance to the U.S. a major theme of LOGA luncheon

NEW ORLEANS, La – Top Obama Administration officials who visit the state should not expect an audience with Don Briggs, president of the Louisiana Oil and Gas Association (LOGA).

In his keynote address at Thursday’s LOGA’s “State of the Industry” luncheon in New Orleans, Briggs was particularly critical of Interior Secretary Ken Salazar and Michael Bromwich, the director of the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE). Although both federal officials have expressed support for increased production in the Gulf Coast, these statements do not square with their actions, Briggs told audience members.

“They talk about wanting to help [the domestic oil and gas industry], but it’s like watching a magician who is doing one thing with his hands but the action is really somewhere else.”

When Salazar and Bromwich last visited Louisiana, members of the state’s congressional delegation invited Briggs to meet with them. But, he declined. “Been there done that,” said Briggs.

“They tell you one thing and they do another. We give them too much attention and way too much credit because they do not want us to go back to work.”

LOGA’s luncheon, with approximately 40 attendees, coincided with the one-year anniversary of the British Petroleum explosion in the Gulf that resulted in the death of 11 workers and spilled an estimated five million barrels of crude oil. While BP clearly made costly mistakes, there is a large body of evidence that shows the industry as a whole is very responsible and innovative, Briggs said. There are about 40,000 wells in the Gulf, and deepwater drilling has taken place safely and effectively in 1298 wells, he pointed out.

Industry workers on rigs who use joysticks to control robots in the deep water are performing a task that is the equivalent of “going to the moon every day.” Even so, he argued, a change in administration is needed before the region can fully recover economically.

Looking ahead over the long-term, oil and natural gas are not going away and this reality puts the state in a strong strategic position, especially if the right mix of polices are in place, he continued.

“Louisiana is the Aorta of America,” Briggs said. “When we shut down our refineries this means 60 to 70 percent of the fuel that runs this country gets shut down… We will become even more important to this country’s national security and infrastructure over time.”

Unfortunately, for the moment, investors are reluctant to re-enter the Gulf, Briggs lamented. Prior to the BP spill, there were 61 rigs in the entire Gulf and now there are only 26. Where there used to be almost six new deep water permit applications per month, there is now only one, he added. Shallow water permits are also down from about seven to under five, he said.

“You have to understand one thing,” Briggs continued. “If [the administration officials] wanted us to drill in the Gulf of Mexico, we would be drilling.”

The Obama Administration’s actions have created an “unprecedented uncertainty” in the Gulf of Mexico both for small independent companies and for major oil companies, Briggs observed.

He also said that policymakers should carefully consider the real value of renewable efforts, which tend to be very expensive. While it may be fine to have some solar and wind, “they are not going to be the driving fuel of the future,” Briggs said. “Ethanol is the joke of jokes.”

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