Oil Majors Form JV sans BP

Source:

"Move suggests oil majors to stay active in the Gulf's deep waters."

Four of the big five Western oil majors have formed a $1 billion nonprofit joint venture aimed at combating future oil spills, possibly to head off stricter offshore-drilling rules. Exxon Mobil Corp., Royal Dutch Shell plc, Chevron and ConocoPhillips plan to build a rapid-response system to help contain future blown-out oil wells in the Gulf of Mexico.

The four companies will form the nonprofit Marine Well Containment Co., setting aside $1 billion to develop a system that mobilizes within 24 hours of a blown oil well in water up to 10,000 feet deep to capture up to 100,000 barrels a day.

Absent from the effort is BP, the operator of the Macondo well, which caused the biggest oil gusher and environmental disaster in U.S. history and prompted a drilling moratorium from the federal government.

Analysts at Houston energy research firm Tudor Pickering Holt said the launch of Marine Well Containment shows that the industry "is ready to have backup systems in place in the unlikely event of a Macondo repeat."

The move also signals that the oil majors plan to stay active in the deep waters of the Gulf.

"It's probably not surprising that BP is not in the initial group, but we have to believe what BP has learned will be incorporated into this effort," analysts said.

The move comes as a U.S. panel reviews offshore-drilling practices, prompting talk of stricter government rules on blowout preventers and other measures to prevent and fight spills.

Earlier this week, oil-service sector leader Halliburton Co. declared that the Gulf of Mexico oil leak will "usher in a new regulatory climate."

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