Why BP Abandoned Its Plans to Drill in the Great Australian Bight

Everyone's favourite big petroleum corporation, BP, has withdrawn its plans to drill for oil reserves off the coast of South Australia. It comes after months of push back from environmental groups and growing scepticism from the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA).

Before BP's announcement on Tuesday, NOPSEMA had rejected the oil giant's Bight drilling proposal three times in a row. The biggest concern was the potential for widespread pollution in the event of an oil spill.

Back in February, the Wilderness Society's SA director, Peter Owen, told VICE an oil spill in the Bight would be devastating for the state's fishing and tourism industry. By his estimate, the damage could clock in at AU$1.4 billion.

While there has been oil exploration in the Bight before, it's never been as far off the coast as BP was proposing—or as deep. BP wanted permission to drill four exploration wells which would stretch between 1–2.5 kilometres deep. If NOPSEMA gave the green light, work on the first two wells was slated to start in late 2016.

As Owen pointed out though, the Great Australian Bight is an incredibly treacherous region—Woodside Petroleum had to pull out of drilling there in the mid-2000s because of the harsh conditions. It's also remote, unlike the Gulf of Mexico, where BP's Deepwater Horizon disaster struck in 2011. This was a relatively sheltered oil field "with the might of the American oil industry on its doorstep," Owen said.

Yet oil still flowed for 87 days until it was finally capped, causing the largest oil spill in history. In 2015, BP had to pay a AU$24.5 billion settlement over the disaster.

In a statement released Tuesday, BP didn't mention environmental concerns factoring into its decision not to progress with its exploration drilling program in SA. Rather, the fuel supplier says that the plans are no longer in alignment with its "strategic goals."

"This decision isn't a result of a change in our view of the prospectivity of the region, nor of the ongoing regulatory process run by the independent regulator NOPSEMA," BP's Australian Managing Director of Exploration and Production Claire Fitzpatrick said. "It is an outcome of our strategy and the relative competitiveness of this project in our portfolio."

South Australia's treasurer Tom Koutsantonis hit back against the oil giant, angered the decision would be a blow to his state's already-struggling economy. "They made a promise to the Australian Government that they would spend nearly $1.4 billion on exploration in the Great Australian Bight when they tendered for these tenements and now, they withdraw," he said.

Koutsantonis also called for BP to release all of its confidential research and exploration work into the Bight to the public, in the hope of attracting other companies to the area.

However, the Wilderness Society's national director Lyndon Schneiders said ultimately it's just too expensive for anyone to safely drill in the Bight. "This decision shows that it's too expensive to establish the significant and costly risk management and clean up capacity infrastructure needed to protect our communities from the enormous spill risks associated with drilling in this part of the world," he told VICE.

BP acknowledged the decision would be a financial blow South Australia. "We acknowledge our commitments and obligations and our priority now is to work with government and community stakeholders to identify alternative ways of honouring these," Fitzpatrick said.