Offshore giant BP insisted last night that deep-water drilling in the huge oil and gas fields west of Shetland would be less risky than similar exploration in the Gulf of Mexico.
The company’s outgoing chief executive also assured MPs that the company’s £12billion, five-year investment programme for the North Sea would not be blown off course by the financial impact of the Deepwater Horizon disaster.
Tony Hayward defended the firm’s safety record as he gave evidence to the Commons energy and climate-change committee – and said recent criticism of BP operations had not exposed any fundamental weaknesses.
The MPs are conducting an urgent inquiry into the implications of the Gulf of Mexico oil spill for deep-water drilling in the UK.
Mr Hayward has been at the centre of the storm surrounding offshore drilling since the explosion on the Deepwater Horizon rig in April killed 11 workers.
He said the US disaster, and the costs of the clean-up incurred by BP, would not prevent the very significant investment the company was making in North Sea exploration.
“BP remains very committed to oil and gas exploration in the North Sea and intends to make absolutely sure all the lessons, in all the dimensions we have discussed today, are fully applied to everything we do in the UK,” he said.
Mr Hayward’s comments about the security of BP’s North Sea investment were welcomed by committee member Sir Robert Smith, Liberal Democrat MP for West Aberdeenshire and Kincardine.
The politician said later: “This will reassure all those in the north-east whose jobs depend on this investment.”
Mr Hayward told the committee he did not think it was wise to bring in a moratorium on deep-water oil and gas drilling, given the global demand for energy.
He said deep-water oil and gas would provide an important part of the world’s energy supplies as demand grew, existing oil fields declined and the world moved to a more diverse energy mix.
BP has an exploration prospect in the deep waters west of Shetland that it plans to drill in 2011.
Mr Hayward said lessons could be learned from the Deepwater Horizon explosion but the challenges in the gulf were different to those in the North Sea.
He said the gulf was “undoubtedly” a more challenging environment than west of Shetland, where reserves under deep water were not at high temperature and high pressure.
In his first UK public appearance since the US accident, Mr Hayward said the disaster had been personally “devastating” because he had made safety the firm’s top priority.
However, he was forced to explain why official inspections of BP platforms in UK waters had led to criticism of some oil-spill training processes.
Mr Hayward told the MPs: “I do not believe that the issues that were reported point to any fundamental weakness in our North Sea operations.
“We have a very strong track record in the North Sea. It is better than the industry average. We have seen major improvements in the course of the last two years.”
He said a good indicator of safety performance was BP spills, which had fallen by 20% over the last two years.
In July, the company announced Mr Hayward was stepping down as chief executive on October 1, to be replaced by American Bob Dudley.
The bill for the gulf disaster is expected to top £20billion.
Mr Hayward denied cost-cutting was a factor in the Deepwater Horizon incident.
“We have found no evidence in our assessment and investigation of this accident to suggest that costs were any part of how this occurred,” he told the committee.
“We have made safe and reliable operations the number one priority of BP.”