BP to start drilling off Libyan coast

Oil giant's shock revelation is the latest twist in a tale of politics, pollution, terrorism – and violent death

The tortuous saga of BP, the Gulf of Mexico, the Lockerbie bombing and an America which feels itself badly wronged took another turn yesterday when it emerged that the oil company is about to start drilling at an even greater depth in, of all places, Libyan waters.

And, as that information was being absorbed, there came an announcement that Jack Straw, the former justice secretary, had declined an invitation to attend the upcoming US Senate hearing into possible links between BP and the release last August of Abdelbaset al-Megrahi, who was convicted of the murder of 259 passengers on Pan Am Flight 103, and 11 Lockerbie residents. Megrahi, who was diagnosed with cancer, was put on a plane back to Tripoli after doctors said he had only three months to live.

The Senate Foreign Relations Committee is investigating allegations that the release, officially on compassionate grounds, was ordered in return for economic co-operation, including access to oil and gas fields. Tony Blair, former prime minister and "friend of Gaddafi", has also become embroiled in the affair.

Scottish ministers have refused to take part in the Senate hearing, and yesterday, one senator asked Edinburgh to reconsider. Senator Frank Lautenberg said in a letter to Alex Salmond, Scotland's First Minister: "I am pleading for direct representation from the Scottish government at our hearing next week to help us seek answers. Your co-operation in sending a knowledgeable person will help establish a credible record of what transpired."

The senators are understood not to have ruled out inviting the group of doctors whose assessments contributed to the conclusion that Megrahi had only three months to live. They may have to settle for copies of the medical reports, although the Scottish authorities have guarded these closely until now.

BP is also under pressure to attend the Senate hearing on Thursday into allegations, ignited by the Gulf oil spill controversy, that it influenced a UK government prisoner-transfer treaty with Libya to win lucrative contracts worth up to $20bn. It is expected to send one of its highest-ranking executives, possibly Tony Hayward, its chief executive, or Sir Mark Allen, its special adviser; both have been invited. "We have not responded yet but I would expect that someone would attend," a BP spokesman said yesterday.

It is even possible that, come Tuesday afternoon, Tony Hayward will be on his way out of BP. Industry sources said last night that he has told the board he is prepared to announce his departure on Tuesday when the oil giant announces half-year results along with estimates for the cost of the oil spill. His likely successor would be Robert Dudley, the American who has taken day-to-day charge of cleaning up and handling the oil spill from Mr Hayward.

William Hague yesterday became the latest politician to dash hopes that the UK would contribute significantly to the Senate Foreign Relations Committee's inquiry into Megrahi's release. The Foreign Secretary released a letter to the committee chairman, John Kerry, stating that, although the bomber's release was "wrong and misguided", it was "legally and constitutionally proper" that the decision had been made by the Scottish government.

Mr Hague did, however, confirm that several discussions were held between the then foreign secretary, Jack Straw, and BP ahead of a controversial prisoner-transfer agreement being agreed with Libya in 2007. Despite this, in a letter to Senator Robert Menendez, a member of the committee, Mr Straw said: "It was ... Mr Kenny MacAskill, the Scottish Justice Secretary, who last August made the decision to release Mr al-Megrahi on compassionate, medical grounds. I had absolutely nothing to do with that decision. I saw no papers about it, and was not consulted about it. Indeed I was on holiday at the time and only learnt about it from an item on the BBC News website."

All of these manoeuvres – plus continuing wrangles over the widespread contamination of the Gulf of Mexico and its extensive shoreline by the massive amounts of oil spilled when the BP-rented Deepwater Horizon rig exploded on 20 April, killing 11 men – mean that the new Libyan drilling is unlikely to be seen in the US as normal commercial oil exploration. It is far too loaded with emotive freight for that, especially given the degree to which US livelihoods in the south-west have been ruined by the Gulf oil spill, and the scale of American losses on Pan Am 103.

BP is pressing ahead with deep-water drilling off the coast of Libya "within weeks". The oil firm is refusing to delay its plans, outlined as far back as 2007, despite fears that it has not learned any lessons from the Deepwater Horizon disaster. At 1,700m, the Gulf of Sirte well would be 200m deeper than the ill-fated Gulf rig. A spokesman would not be drawn on an exact timetable. "We are exactly on schedule," he said, adding: "If there are any lessons that come out of the investigation in to the Deepwater Horizon spill we will of course apply them to our operations all over the world."

One of the lessons to be learned is not to turn off alarm systems that warn of leaks. A rig engineer told US investigators on Friday that an emergency alarm which could have warned workers on the doomed rig was intentionally disabled. Mike Williams, chief engineer technician aboard Swiss-based Transocean's rig, said the general alarm which could have detected the cloud of flammable methane gas that enveloped the rig's deck was "inhibited" so that workers' sleep was not disturbed.

BP struck a $900m exploration deal with the Libyan government in May 2007, barely three months before the Scottish government sparked international consternation by releasing Megrahi. The agreement allows it to explore 54,000 square kilometres (21,000 square miles) of the onshore Ghadames and offshore Sirte basins, which could see it drill 17 exploration wells and up to 20 appraisal wells.

Meanwhile, back at the scene of the Deepwater Horizon disaster some ships prepared to move back to the site of BP's broken oil well yesterday as the remnants of a weakening Tropical Storm Bonnie rolled into the area. By yesterday morning, the rig drilling the relief tunnel that will blast mud into the broken well to permanently seal it was getting ready to return. The storm has affected the operation. Work on the relief tunnel stopped on Wednesday, and it will take time to restart. Crews on the drilling rig pulled up a mile of pipe in 40ft to 60ft sections and laid it on deck of the rig so they could move to safer water. And the threat of severe weather remains. Hurricane season is at its most active in early August, extending into September.

BP's spill, the worst in US history, is believed to have spewed more than five million barrels of oil into the Gulf. Officials say the environmental disaster has killed or injured more than 700 sea turtles and dozens of dolphins.