Oil drilling resumes in Gulf of Mexico

Last updated 08:29 14/03/2011

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The US government is allowing deepwater drilling to resume on another Gulf of Mexico well as the region recovers from BP's devastating oil spill.

BHP Billiton said Saturday that the permit will allow it to get back to work in its Shenzi field, located about 193 kilometres off Louisiana's coast.

The well, about 1,300 metres below the surface, began production in March 2009, but drilling stopped last year amid the backlash to the April 2010 blowout of a BP well in the Gulf of Mexico.

The explosion resulted in the worst offshore oil spill in US history, raising questions about the safety of deepwater drilling.

This is the second deepwater permit that the Bureau of Ocean Energy Management, Regulation and Enforcement has issued in the Gulf within the past two weeks.

Noble Energy had already received clearance to resume drilling on a well about 113 kilometres southeast of Venice, Louisiana.

They're the first permits to be granted in the Gulf since the agency imposed a moratorium on exploration in waters deeper than 150 metres last June.

The moratorium was lifted in October, but deepwater drilling couldn't resume without government clearance.

Oil industry executives and some US lawmakers had already been pressing regulators to issue new permits before a recent spike in oil prices magnified the pressure.

The first new permit came the week after oil prices surpassed $US100 per barrel and gasoline prices soared to their highest level in two and a half years.

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- AP

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