Tuesday, July 13, 2010

Deep Water Rigs Moving Out of the Gulf: Probably Never to Return

This is the fourth rig that is moving out of the Gulf (Discoverer Americas drillship/Transocean) that I know of, and can document a link. This is a Transocean rig which will move to Egypt next week (mid-Sept, 2010). The Marianas in the next paragraph has already departed for Nigeria. (Links break without subscription after period of time.)

This is the third rig that is moving out of the Gulf (Marianas/Transocean) (actually, it's the third rig that I know of, and can document a link). This is a Transocean rig which will move to Nigeria, and is under contract with Italy's ENI. I doubt "we" will ever see this rig back in the Gulf -- at least in my investing lifetime. 

This is the second rig to move out of the Gulf (Ocean Endeavor/Diamond Offshore). Once moved, unlikely to return for a very long time.

The story of the first rig to move from the Gulf is posted here (Ocean Confidence/Diamond Offshore).

So much for American energy independence.  Louisiana is in a world of hurt. That's what happens when they elect a governor the administration does not like. The administration directs yet another moratorium on off-shore drilling, based on criteria other than depth of water. Anything to destroy the oil industry.


September 1, 2014: the statement that rigs are never likely to return seems to have been wrong. There are reports that the GOM is "back."

May 29, 2012: more evidence that after-spill actions taken by the government caused more economic damage than the incident itself.
Only days after the incident, Interior Secretary Ken Salazar issued a moratorium on new permits for deepwater offshore oil drilling over strenuous objections from the industry and the impacted region itself. The Gulf Coast's continued support for offshore drilling is unsurprising, given that though the moratorium only applied to 33 applications, those included some of the more profitable projects for the region. A report from Louisiana State University estimated the cost to the region of a moratorium could reach as high as $2.1 billion and more than 8,100 jobs. Across the country, the report expected as many as 12,000 jobs to be lost.

One year after the implementation of the moratorium, a study conducted by Quest Offshore Inc. for the National Ocean Industries Association and the American Petroleum Institute suggested that slowed drilling permit approvals under the Obama administration and the moratorium had contributed to the loss of more than 60,000 jobs through the Gulf region from 2008 to 2011.

An API-commissioned study from Quest Offshore estimated even more dramatic losses, suggesting that as many as 90,000 jobs had been lost in 2011 alone. As many as 11 offshore oil rigs were thought to have left for calmer waters in Brazil, Egypt and Angola, with total costs for the Gulf Coast through 2015 estimated at around $21.4 billion.
December 30, 2011: interesting spin by the AP.  Compare this article with the industry's take on the permitorium in the story below, dated December 23, 2011. This is all about spin-Obama. In case the link breaks, this is a story that says that after 18 months, the "Gulf is back." 

December 23, 2011: despite a lifting of the ban on drilling in the Gulf, rigs not coming back

July 22, 2010, on CNBC: Diamond Offshore/CEO on CNBC says the Gulf moratorium will result in direct loss of about 200 US jobs. Some of the senior employees on their rigs will move with the rigs to Africa. The CEO is concerned that if the moratorium is prolonged, training of personnel to work on deep water rigs will shift overseas, eventually ceding US dominance in deep water drilling to other countries. (Personally I doubt that will happen, but the employees will be coming from countries other than the US as these rigs move overseas.)

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