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Shell attacks BP over oil well safety, as US lifts ban on Gulf of Mexico drilling

Peter Voser, the chief executive of Royal Dutch Shell, has strongly criticised BP’s well design and internal inquiry into the causes of the Gulf of Mexico oil spill.

By Rowena Mason, Energy Correspondent
Published: 8:58PM BST 12 Oct 2010

The Deepwater Horizon exploded and sank on April 20, killing 11 men Photo: AP

BP’s report into how the Deepwater Horizon exploded and sank on April 20, killing 11 men, cleared the company of any serious negligence.

But Mr Voser said to “correctly investigate” the company ought to have looked more closely at its own well design.

The oil executive sought to distance the industry from BP’s mistakes, saying his own company would have had more safety barriers in place.

“From what I know today, Shell clearly would have drilled this well in a different way and would have had more options to prevent the accident,” Mr Voser said at the Oil & Money summit in London.

However, the Shell boss acknowledged that all oil companies failed to prepare properly for a major accident, adding that he expects tighter regulation.

BP did not send any representatives to the major annual conference and declined to comment on Shell’s criticism.

“The report was very clear in its parameters and very clear in its conclusions,” a BP spokesman said.

Mr Voser’s remarks came as executives were cheered by the news that the White House was to lift its ban on US deepwater drilling.

Ken Salazar, US Secretary of the Interior, said: “I have decided that it is now appropriate to lift the suspension on deepwater drilling for those operators that are able to clear teh higher bar that we have set.

“The oil and gas industry will be operating under tighter rules, stronger oversight, and in a regulatory environment that will remain dynamic as we continue to build on the reforms we have already implemented.”

Permits are expected to be issued before the end of the year.

It also emerged on Tuesday that the European Union is scaling back its calls for a similar moratorium, following opposition from member governments.

However, at the London conference, the oil industry still painted a gloomy picture of the consequences of BP’s catastrophic spill.

Bernard Duroc-Danner, the chief executive of Weatherford, the oil services group that made a key valve in BP’s exploded well, said the main word for companies would be “more” – in terms of time, costs, liabilities, regulation, risks and rewards.

“How many real estate owners can afford to stay in Gulf of Mexico deepwater? The ones that have big balance sheets,” Mr Duroc-Danner said. “Do you really think that people who don’t have a very large balance sheet will risk the entire company on human error?”

“It is likely that there will be ownership shifts. A fair amount of properties over time will find themselves on the auction block in the Gulf of Mexico,” he said.

“What will happen to deepwater in general is that it will take more time, it will be more expensive, and will yield less at a later time.”

The Weatherford boss said he thought oil companies would look to drill more on land rather than offshore, and that business from the Gulf of Mexico would migrate to Africa, Norway and Brazil.

He said that he expected fewer high-pressure, high-temperature wells to be drilled in future.

Ivan Sandrea, vice-president of Statoil, the Norwegian state energy company, agreed that the most difficult wells would probably not be attempted.

However, he said the world would still need deepwater drilling and estimated oil from more than 1,000 feet under the sea would still make up 30pc of the total supply.

“We don’t see that the potential for offshore has changed,” Sandrea said. “We do see a higher-cost environment going forward.”


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