1st Oil Rig Leaves US Waters due to Obama Moratorium

Discussion in 'Business & Economics' started by madanthonywayne, Jul 11, 2010.

  1. madanthonywayne Morning in America Registered Senior Member

    In what may signal the beginning of a mass exodus, the Ocean Endeavor Oil rig is being moved from US waters to Egypt. Despite his repeated losses in court regarding the ban on deepwater drilling, the Obama administration has said it will not allow drilling to resume until it is ready to implement new safety regulations.

    Once these rigs leave, it will be a minimum of 5 to 10 years before they could come back. Thus resulting in the loss of tens of thousands of US jobs.
    WASHINGTON — Diamond Offshore announced Friday that its Ocean Endeavor drilling rig will leave the Gulf of Mexico and move to Egyptian waters immediately — making it the first to abandon the United States in the wake of the BP oil spill and a ban on deep-water drilling.

    And the Ocean Endeavor's exodus probably won't be the last, according to oil industry officials and Gulf Coast leaders who warn that other companies eager to find work for the now-idled rigs are considering moving them outside the U.S.

    Devon Energy Corp. had been leasing the Endeavor to drill in the same region of the Gulf as BP's leaking Macondo well, which has been gushing crude since a lethal blowout April 20.

    But Diamond announced Friday it will lease the rig through June 30, 2011, to Cairo-based Burullus Gas Co., which plans to send the Endeavor to Egyptian waters immediately.

    Devon is one of three companies that has cited the deep-water drilling ban in trying to ease out of contracts to lease Diamond rigs. Diamond, a drilling company, said it expects to make about $100 million from the deal, including a $31 million early termination fee it recovered from Devon.

    Larry Dickerson, CEO of Houston-based Diamond, signaled that other of his company's rigs could be relocated, too.

    "As a result of the uncertainties surrounding the offshore drilling moratorium, we are actively seeking international opportunities to keep our rigs fully employed," Dickerson said. "We greatly regret the loss of U.S. jobs that will result from this rig relocation."

    It was unclear how many U.S. jobs could leave with the Ocean Endeavor, but typically more than 100 workers are on the rig at any given time, doing everything from drilling to cooking meals. Onshore, a network of businesses supplies the rigs with groceries, equipment, uniforms and drilling materials.

    "It's not unusual for an energy service company to have 1,000 vendors that they buy from or purchase services from," noted Rep. Kevin Brady, R-The Woodlands. As a result, Brady said, the economic damage from the moratorium stretches far and wide.
    Fearing for investment

    Brady and other oil-patch lawmakers have been pressing President Barack Obama to end the six-month moratorium he imposed on 33 deep-water projects May 27 after the explosion of the Deepwater Horizon rig that was drilling a well for BP.

    Obama said the ban was needed to allow time for new safety standards to be implemented and a commission to investigate the cause of the April 20 blowout at BP's Macondo well.

    Although the administration on Thursday lost its second bid to keep the ban in place while it appeals a federal court's decision to strike down the moratorium, federal regulators plan to try again with a revised version soon.

    Dan Pickering, a financial analyst with Tudor, Pickering Holt & Co. Securities, said the legal uncertainties surrounding the ban - and the administration's plan to issue a new, revised moratorium - ensure that no companies will resume deep-water drilling in U.S. waters anytime soon.

    "Are you really going to spend $5 million … getting ready to drill a well that someone would then probably block you from drilling?" Pickering said.
    Lawmakers complain

    Pickering added that prospects are high that a dozen rigs ultimately could leave the Gulf of Mexico because of the ban.

    Brady said the rig owners are searching for revenue - even if it means relocating to get it.

    "There are two types of rigs in the deep-water Gulf today: those that are leaving the country and those that want to, because with this moratorium hanging over their heads, they simply can't go back to work," Brady said. "I'm afraid this is the first of many rigs and many American jobs to leave the Gulf."

    Once the rigs relocate, it could be a minimum of five to 10 years before they return, predicted Rep. Pete Olson, R-Sugar Land.

    "We cannot afford to lose these jobs or the energy they provide," Olson said. "President Obama should allow this moratorium to remain lifted and let Americans get back to work."
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  3. Repo Man Valued Senior Member

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  5. PieAreSquared Woo is resistant to reason Registered Senior Member

    Once the rigs relocate, it could be a minimum of five to 10 years before they return, predicted Rep. Pete Olson, R-Sugar Land.

    So you're saying that the rigs have a 5 to 10 year development time. The events that took place leading to this disaster were created 5 to 10 years ago.
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  7. soullust Registered Senior Member

    I guess If that is the Case good ole GWB was responsible for this as well

    5 to 10 years my ass..
  8. cosmictraveler Be kind to yourself always. Valued Senior Member

    Well that is one down and over 4000 to go. There are more that want to drill in the Gulf and are just waiting to go there.

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  9. spidergoat Liddle' Dick Tater Valued Senior Member

    How many fishing jobs are gone now due to inadequate regulations (of the oil industry)?
    Last edited: Jul 12, 2010
  10. PieAreSquared Woo is resistant to reason Registered Senior Member


    Well <pun intended> .. it does kind of sound like they are saying that doesn't it

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    In not so many words .. I know they like to place the blame on OB for this , so why would they say something like this

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  11. kmguru Staff Member

    We do not need any oil platforms as we are getting so poor, we do not need any....

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