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The Great Australian Bight. Image courtesy of Nachoman-au/Wikimedia Commons.

BP has canceled its plans to explore the offshore Great Australian Bight (GAB) in offshore South Australia.

BP said on Tuesday that the “decision follows the review and refresh of BP’s upstream strategy earlier this year, which included focusing exploration on opportunities likely to create value in the near to medium term, primarily building on BP’s significant existing upstream positions.”

The company added that it has determined that the GAB project “will not be able to compete for capital investment with other upstream opportunities in its global portfolio in the foreseeable future.”

BP has informed federal and state governments of its decision.

The company said it also consulted with Statoil, BP’s joint venture partner in the project.

BP said that Norway’s Statoil “fully” understands “BP’s change in strategic direction and accept BP’s decision.”

“This decision has been incredibly difficult and we acknowledge it will be felt across the South Australia region. We have made significant progress with preparations for drilling in the Bight with the support of communities and federal, state and local governments. We acknowledge our commitments and obligations and our priority now is to work with government and community stakeholders to identify alternative ways of honoring these,” BP’s managing director for exploration and production for Australia Claire Fitzpatrick said.

BP was awarded exploration licences for four blocks in the Ceduna area of the GAB in January 2011.

Seismic data was acquired in the area in late 2011 through early 2012.

BP has a contract with Diamond Offshore Drilling for the provision of a new Moss CS60E design semisubmersible drilling rig tied to the project.

Diamond commissioned Hyundai Heavy Industries to build the rig that is specially designed for use in deep water and harsh marine environments.

BP said its decision does not impact the rig contract.

Norway’s Statoil acquired a 30 percent interest in the GAB licences in 2013.

BP operates the licenses with a 70 percent interest.

Last month, the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) requested more information from BP about its Great Bight exploration plans.

NOPSEMA had previously rejected two environmental plans submitted by BP for its GAB drilling plans, according to the Guardian.

Exploration drilling at the site was initially scheduled to start in the first half of 2016.