HOUSTON -- The federal government has just approved a deep-water drilling permit for Houston-based ATP Oil & Gas.

A rarity these days, this is just the third permit issued since the Gulf Oil disaster last year.

When she was christened the BW Pioneer in October of 2009 she was just another oil ship coming off the line.

Now she is a history maker.

This is the first time we are going to see an FPSO in the Gulf of Mexico, although they have been located in other parts of the world, said Oil Analyst
Andy Lipow.

FPSO is Floating Production Storage and Offloading -- technically a ship, a really big ship.

The BW Pioneer is owned by the Norwegian company BW Offshore. Its U.S. offices are here in Houston.

The company confirms that the ship is already anchored in the gulf 165 miles off the coast of Louisiana, in more than 8,000 feet of water.

This will be, by far, the deepest water an FPSO has worked more than 8,000 feet.

The pioneer is built on the hull of a former supertanker, has an onboard storage capacity of 600K barrels, and can bring up 80K barrels a day from multiple wells. Add to that 500K cubic meters of gas.

The ship is designed to produce the oil and gas and off load it to other tankers that will bring it to refineries in the Gulf Region.

The plan is to begin with two wells in the cascade block and one Chinook connected. If that goes as planned seven more from each field are planned to be added in a second phase.

It has one big advantage.

If there were to be a storm, or a hurricane that would come through the Gulf of Mexico the ship disconnects and it goes off and waits out the storm, he said.

It will not only keep production on longer, but also avoid potentially catastrophic and expensive damage. Industry experts say it is a good sign.

We are taking the first steps forward to returning into the Gulf of Mexico exploration and production business, he said.

Still missing the big ticket is a permit for new deepwater drilling.

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