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U.S. Approves Shell Plan to Drill in Gulf of Mexico


WASHINGTON—The U.S. approved a Royal Dutch Shell PLC plan to drill for oil in five locations deep under the Gulf of Mexico.

The Shell proposal is the second deep-water exploration plan approved in the Gulf since the U.S. government lifted a moratorium on deep-water drilling in October. The moratorium was imposed following the BP PLC oil spill in April 2010. At least six other deep-water plans are pending for the Gulf.

Companies apply for permits to drill after receiving approval for an exploration plan.

The Shell plan approved Wednesday, for the so-called Appomattox discovery, includes five wells in about 7,200 feet of water roughly 72 miles, or 116 kilometers, off the Louisiana coast. Shell runs the Appomattox venture and holds an 80% stake. Nexen Inc. holds the remaining 20%.

U.S. regulators assessed the plan and determined it met new safety standards instituted after the Gulf oil spill last year. The drilling “would not have a significant impact on the quality of the human environment,” according to a press release from the Bureau of Ocean Energy Management, Regulation, and Enforcement.

Marvin Odum, president of Shell’s U.S. subsidiary, said the company was “pleased” with the news.

Environmental groups have signaled they would challenge the government in court if it determined the Shell plan would have no significant impact.

Michael Bromwich, head of the ocean energy bureau, defended the decision and the new safety standards. “The standards are higher than they used to be,and further support our goal of ensuring that deep-water exploration is done more safely and with greater protections for the environment than ever before” he said in the bureau’s press release.

“After decades of responsible offshore drilling operations in environments around the globe, this approval is further evidence of Shell’s expertise and confidence in offshore drilling and should be strongly considered as Shell moves forward with additional exploration in both the Gulf of Mexico and Alaska,” Mr. Odum said through a spokeswoman. The ocean energy bureau also said it would no longer issue news releases announcing its approval of offshore exploration plans, calling the approvals “standard.”

The agency hadn’t sent such announcements before the Gulf oil spill.


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