UPDATE 2-U.S. emphatic: no deal to let BP resume drilling

Mon Apr 4, 2011 11:56am EDT

Related Topics

 * UK media say BP, U.S. govt in talks to resume drilling
 * Salazar - "absolutely no such agreement"
 * Says BP needs to follow same process as other firms
 * Transocean "doesn't get it" on safety - commission chair
 * Gulf drilling key for BP's "reputational issues"-analyst
 (Adds analyst, comments on Transocean)
 By Mica Rosenberg and Roberta Rampton
 MEXICO CITY/WASHINGTON, April 4 (Reuters) - The U.S.
interior secretary on Monday rejected reports that BP
(BP.L)(BP.N) was striking a deal to resume deepwater drilling
in the Gulf of Mexico a year after the worst oil spill in U.S.
 British media have said BP is in talks with Washington to
restart drilling at existing fields following the blast on the
Deepwater Horizon rig that ruptured the company's underwater
Macondo well, unleashing millions of barrels of oil.
 Interior Secretary Ken Salazar called that a
"misconception", and a spokeswoman for the Bureau of Ocean
Energy Management regulator said "there are no ongoing
 "There is absolutely no such agreement nor would there be
such an agreement" with BP to resume drilling, Salazar said at
a briefing while visiting the Mexican capital.
 He added that BP would need to go through the same review
process to resume drilling as other companies.
 Salazar also condemned rig operator Transocean Ltd
(RIGN.VX)(RIG.N) for granting bonuses based on what it said
last week was an "exemplary" safety record in 2010,
notwithstanding the rig blast that killed 11 workers. One of
the leading members of a presidential panel on deepwater
drilling said the firm "just doesn't get it".
 U.S. legal probes into the accident are ongoing, but a
presidential commission earlier this year released a report
blaming the disaster on systemic safety lapses and a series of
mistakes made by BP and its contractors.
 Months after lifting a temporary ban on deepwater drilling,
the bureau has begun approving permits for such activity,
clearing more than a handful of projects in the past few
 BP is a partner in a well operated by Noble Energy (NBL.N),
which received the first permit since the end of the ban.
 Last week, BP America CEO Lamar McKay said the company was
"working constructively" with regulators to meet new rules.
 "We are encouraged by both verbal and written messages we
have gotten from regulators," McKay had said.
 BP is the largest holder of deepwater acreage in the Gulf
of Mexico and the region is key to the company's future
 "The Gulf of Mexico is by value about 15 percent of the
company at the moment so it's important that they drill there
to replace reserves," Investec analyst Stuart Joyner said.
 "If you look at the company's reputational issues, it's
important that they're seen resuming business in the Gulf of
Mexico alongside other participants. It's very much a
psychological issue," Joyner said.
 BP Chief Executive Bob Dudley said in February that the
company expected to see production growth from its Gulf of
Mexico operations returning in 2012 but this would depend on
the timing of a drilling restart.
 Graphic on U.S. offshore drilling:
 Graphic on oil spills:
 Salazar was in Mexico with officials from the White House
commission that investigated the BP oil spill to discuss
offshore drilling in the Gulf.
 They condemned the bonuses provided by Transocean, which
said in a filing last week that 2010 was its best year for
safety on record.
 "In my own view, 2010 was probably the greatest year of
pain in terms of oil and gas development in the deep water all
across the world, especially in the Gulf of Mexico," Salazar
said, telling reporters Transocean was "at some fault" for the
 William Reilly, co-chairman of the oil spill commission,
called Transocean's comments "embarrassing".
 "It's been said with respect to the disaster that some
companies just don't get it -- I think Transocean just doesn't
get it," Reilly said.
 The U.S. offshore drilling regulator is holding a hearing
this week on the spill, but it was unclear whether Transocean
employees would participate. [ID:nN01101083]
  (Additional reporting by Sarah Young in London and Tom
Doggett in Washington, additional reporting by Anna Driver and
Kristen Hays in Houston; writing by Ayesha Rascoe; editing by
Dale Hudson)