International News
Oil spill casts doubts on deep water exploration
Posted on: Mon June 14, 2010
International Highlights
LONDON: The disaster caused by the Gulf of Mexico oil spill has cast doubts over the future of deep water exploration and is likely to have the long-term effect of raising oil prices, analysts say.
British oil giant BP has struggled to stem the crude gushing from a ruptured underwater pipe after the Deepwater Horizon rig it leased exploded before sinking into the sea on April 22, causing a major environmental disaster.
The benefits of being able to drill and produce in deep and ultra-deep waters are brought into question now it has become clear that basic remediation of problems is extremely difficult in deep water, said analysts at Barclays Capital.
BP chief executive Tony Hayward concurred, saying: What is taking place is an issue which will impact the global oil and gas industry and will necessarily have a very broad impact not only in the United States but around the world.
The first direct consequence for the industry was the US administration s declaration of a six-month moratorium on new deep-water drilling and delays on planned exploration off the Alaska coast.
Courtesy : The News