BP plc’s BP proposed exploration drilling program for the Stromlo-1 well in Great Australian Bight has not been approved by Australia’s regulatory body – National Offshore Petroleum Safety and Environmental Management Authority or NOPSEMA. The regulatory body is dissatisfied over how the energy major would manage an oil spill should it occur and address community concerns arising from the environmental impact of a spill.
The program is projected to cost over A$1 billion ($710 million). The energy giant’s misfortune stems from concerns that a potential oil spill may have a detrimental effect on South Australia’s $422-million fishing industry and its coastal tourism from Albany in Western Australia to Beachpoint on the South Australia-Victoria border. However, the company will be allowed to resubmit its proposal.
BP intends to drill in the Great Australian Bight, which according to it, is among the last big unexplored basins in the world. However, various environmental groups see the risk of an accident more than five years after the company’s Gulf of Mexico oil spill incident. Therefore, these groups have strongly opposed to BP’s recent exploration proposal. In May 2015, BP had announced its intention to commence drilling in Oct 2016.
Per Australia’s national science agency – the Commonwealth Scientific & Industrial Research Organization – over 85% of the species in the Bight are not found anywhere else in the world. That includes the southern right, sperm and blue whales as well as sea lions and sharks.
BP is one of the major energy companies in the world. The company provides its customers with fuel for transportation, energy for heat and light, retail services and petrochemical products.
BP carries a Zacks Rank #3 (Hold). Some better-ranked players from the energy sector are Energy Transfer Equity LP ETE, Murphy USA Inc. MUSA and Seadrill Partners LLC SDLP. Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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