BP has claimed nearby economies would benefit from a clean-up operation if there were an oil spill at one of their sites.
The company used the argument as part of an application to drill in the Great Australian Bight, The Sydney Morning Herald reports.
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Many citizens were concerned about the possible impact of an oil spill due to BP's less-than-perfect record following the 2010 spill in the Gulf of Mexico.
To assuage concerns, BP argued a spill would be "socially acceptable" and "in most instances, the increased activity associated with clean-up operations will be a welcome boost to local economies".
The National Offshore Petroleum Safety and Environmental Management Authority wrote back, saying the claims needed to be removed or supported by analysis. It also said the submission needed "significant modification" and there were several environmental impacts that had not been properly assessed.
BP decided not to follow through with its plans in November 2016 and said the correspondence released to media was of a draft plan that would have been revised.
"Given the project did not proceed, work on the draft environment plan ceased, so the correspondence in question doesn't represent the final views of BP or the regulator, " a spokesperson told The Sydney Morning Herald.
The authority agreed, saying the plan had not been followed through and BP did not drill in the bight.
Greenpeace senior campaigner Nathaniel Pelle said if any company were to drill in the bight it could be disastrous.
"There is no way to drill for oil safely in the bight," he said.