Drilling in deep Gulf getting busy again

Drilling in deep Gulf getting busy again




Drilling in the deep Gulf of Mexico is becoming robust two years after the oil spill that prompted a six-month moratorium on deep-water exploration, but more of the work now is left to large companies. As The Houston Chronicle reports, triple-digit oil prices are driving much of the activity, making it worthwhile to go forward notwithstanding the cost, risk and heightened government scrutiny of working in waters often a mile deep or more. "We are seeing deepwater drilling coming back with a vengeance in the Gulf," says RV Ahilan, executive vice-president for GL Noble Denton, a technical adviser for the oil and gas industry. "The price is too big to ignore. People are quite keen and are booking rigs for long drilling campaigns in deeper drilling waters." But while activity has resumed, it involves a smaller group of players with the deep pockets and deep experience necessary to navigate the complexity of the Gulf. "It has always been dominated by the large internationals—the BPs and Chevrons—and in the future that is likely to be even more so," say Pavel Molchanov, an analyst with Raymond James. "They are really the only companies that can take on the liability risk of having a multibillion-dollar oil spill." The government awarded 163 deepwater drilling permits for the Gulf in 2009. The number dropped to 74 in 2010, but has climbed since then to 79 in 2011 and 44 through March of this year. Read the full story here.



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