International business - Oil company execs slam drilling ban

Oil executives sharply criticised United States (US) President Barack Obama's six-month ban on deep-water drilling at a major industry conference Tuesday, saying the world did not have enough other sources of oil to eliminate using deep-sea rigs.

The massive oil slick in the Gulf of Mexico and the moratorium imposed by Obama dominated discussions at the World National Oil Companies Congress in London.

Transocean Limited President and Chief Executive Officer Steven Newman, owner of the destroyed Deepwater Horizon rig involved in sending millions of gallons of oil into the Gulf, said Obama's ban, which is currently being reviewed by a US federal judge, was unnecessary.

"There are things the administration could implement today that would allow the industry to go back to work tomorrow without an arbitrary six-month time limit," Newman told reporters on the sidelines of the meeting.

The ban reflects growing unease about oil companies seeking to drill farther out to sea and deeper than ever before.

The process is expensive, risky and largely uncharted, highlighted by the April 20 explosion at the BP-operated rig that killed 11 workers and set off the worst oil spill in US history.

The US Interior Department halted the approval of any new permits for deep-water drilling in the Gulf and suspended drilling at 33 existing exploratory wells, but the moratorium has been challenged in court.

Moratorium overturned

US district judge Martin Feldman later announced his ruling in New Orleans Tuesday, overturning the moratorium on the basis that it was arbitrarily imposed.

Feldman said the Interior Department seemed to assume that because one rig failed, all companies and rigs doing deepwater drilling pose an imminent danger.

The Whitehouse said immediately it would appeal the ruling.

Chevron executive Jay Pryor, also at the London conference, said the US government's would "constrain supplies for world energy".

"It would also be a step back for energy security," said Pryor, global vice-president for business development at the US company.

BP chief of staff Steve Westwell, who was heckled during a speech in which he stood in for Hayward, said "regulators around the world will obviously want to know what happened" to cause the blown-out well in the Gulf, and change their procedures accordingly.

But he said deep-water drilling is needed as supplies of land and shallow-water oil diminish.

"The world does need the oil and the energy that is going to have to come from deep-water production going forward," Westwell said. "Therefore, the regulatory framework must still enable that to be a viable commercial position."

Hayward pulled out of the conference Monday after stinging criticism for spending Saturday at England's Isle of Wight to see his yacht compete in a famous race, an outing that drew outrage on the Gulf coast and an acerbic response from the White House.

Westwell was interrupted twice during his address by protesters from Greenpeace shouting "we need to end the oil age!"

The hecklers were escorted out of the central London hotel by security.

A real tragedy

Shukri Ghanem, the head of Libya's National Oil Corp who serves as the North African nation's de facto oil minister, said he was happy for BP to continue to operate in his country's territorial waters despite the blown-out well in the Gulf of Mexico.

Ghanem, who said he planned to meet with Hayward while in London, said the spill is "a real tragedy, but in a way it's exaggerated".

"It is unfortunate, but it is an opportunity to be more careful in the future," he said.

BP signed an exploration and production deal with Libya's National Oil Company - worth at least US$900 million - in June 2007, going back into Libya for the first time in more than 30 years.

Libya's proven oil reserves are the ninth largest in the world, while vast areas remain unexplored for new deposits.

Outside the conference, one of the protesters, Emma Gibson, called on BP to end its investment in a controversial Canadian tar sands project and end deep-water drilling.

"We really need to speed up progress to end the oil age," Gibson told reporters.

-AP