Pat Dollard

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Financial Times:

Four of the world’s biggest oil companies announced on Wednesday that they were pooling $1bn to form a joint venture to develop a deepwater Gulf of Mexico oil spill response and containment system.

ExxonMobil, Royal Dutch Shell, Chevron and ConocoPhillips will each initially invest 25 per cent in a new standalone company. BP has not been included.

The role of the venture will be to develop and have available in the waters of the Gulf equipment to prevent another spill on the scale suffered by BP’s Macondo well. The joint venture will permit others operating in the deepwater fields to join, allowing them to access the equipment in case they have an accident.

The venture is seen as an attempt by the oil groups to secure permission to return to deepwater drilling in the Gulf after the US government implemented a moratorium on new deepwater drilling in the wake of the BP spill.

The joint venture’s equipment will consist of: a containment vessel, capable of capturing up to 100,000 barrels of crude oil per day, and other high-tech pieces of equipment that can be laid on the surface of the ocean bed to siphon any leaking oil up to the containment vessel.

”This will be state-of-the-art response equipment,” one company said. “In the event the unthinkable happens, we will be able to respond within 24 hours of the incident.”

Following the BP spill, the oil industry as a whole was criticised for not being adequately prepared for a massive blowout, which in the case of Macondo has left a well leaking uncontrollably for three months.

However, the political pressure on the Obama administration to lift the moratorium on deep water drilling in the Gulf has been growing, given the state of the US economy and unemployment figures.

”The moratorium is a meat axe approach which unnecessarily damages innocent parties and could crush a huge, highly successful component of the American economy,” said Robin West, chairman of PFC Energy, a consultancy.

The new joint venture spill response company could well give the Obama administration the backdoor it needs to lift the moratorium.

The White House praised the proposed venture as a positive first step, though it also underscored that the ongoing investigation of the causes of the Deepwater Horizon disaster would ultimately dictate the kinds of safety regulatory reforms that will be needed to make deepwater drilling safe.

Democrat Congressman Edward Markey, BP’s most vociferous critic on Capitol Hill, said the oil industry needed to do more.

“While this could be a rapidly deployed system, the oil companies must do better than BP’s current apparatus with a fresh coat of paint,” he said.

Earlier on Wednesday, Thad Allen, the highest-ranking US official dealing with the day-to-day response to the BP spill, said new leaks had been found in the Macondo well’s blowout preventer, which failed on the day of the explosion.