BP's learned nothing: The oil company is pursuing its riskiest strategy yet

BP is going after huge oil reserves that could make or break its fortunes

Published December 5, 2013 4:31PM (EST)

BP is yet to finish compensating the victims of the 2010 oil spill that killed 11 people and sent millions of gallons of oil spewing into the Gulf of Mexico, but the oil company isn't about to let one major oil spill bring it down. Strapped for cash and in pursuit of bigger, deeper wells, it may be the only company capable of tapping risky reserves worth as much as $2 trillion.

The AP reports:

Three years [after the spill], there are a record 39 rigs drilling in the deep waters of the Gulf of Mexico, according to IHS Petrodata, as drillers probe enormous troves of oil in untapped formations — some of which are under especially high temperature and pressure.

...Environmentalists are alarmed. "You hope (BP) has learned their lesson, but the nature of the business is that there are going to be spills, there is human error," says Athan Manuel, director of the Sierra Club's lands protection program. "These high pressure wells could cause another environmental disaster in the Gulf."

For BP, drilling deeper is a bold and crucial step. CEO Bob Dudley told colleagues at an industry conference last year that management "thought very carefully before re-committing the company to the deep water following the 2010 accident." The spill has cost BP $42.5 billion, and legal battles are ongoing.

BP decided to go forward in a major way. Dudley may not have had much choice — BP needs the oil. Its production is down 21 percent since the oil spill and its share price is 22 percent lower. Big oil companies need to find giant fields to generate enough oil to replace the steady natural declines of existing fields. These big fields are now only found in remote or difficult locations.

To get there, the company is developing equipment that can sustain extreme heat and pressure. In the name of safety, it's also pursuing some low-tech hacks, such as changing the shapes of their "start" and "stop" buttons to make them harder to confuse.

Yet "BP's basic thinking has not fundamentally changed," Robert Bea, an expert on offshore technology, told the AP. "They want to develop those resources so badly, and they want to develop them so quickly, their drive for production overcomes what should be a comparable drive for protection."

By Lindsay Abrams

MORE FROM Lindsay Abrams

Related Topics ------------------------------------------

Bp Gulf Oil Spill Oil Drilling