BP, THE company behind last year's disastrous Deepwater Horizon oil spill, has been granted its first Australian oil exploration permit, which could pave the way for deepwater drilling.

BP, whose Deepwater Horizon well last April spilt near 5 million barrels of oil into the Gulf of Mexico, has been awarded the permit to explore in the Great Australian Bight off South Australia.

Resources and Energy Minister Martin Ferguson yesterday said the government would impose strict standards on BP as a condition of the licence after last year's massive spill.

While the permit gives BP the right to explore and ultimately develop any oil it finds, any drilling would also require further environmental approvals.

''This is the start of a long, extensive, drawn-out and exhaustive process,'' Mr Ferguson said.