as the rigs will be moving away, following the moratorium on drilling,
First rig sails away over drilling ban
Lawmakers and experts fear loss is only the start of offshore exodus
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.
Uncertainty doesn’t make for a healthy business environment,
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.”
Once the rigs relocate, it could be a minimum of five to 10 years before they return, predicted Rep. Pete Olson, R-Sugar Land.
In Louisiana alone, over 320,000 people’s livelihoods are tied to the gas and oil industry.
Professor Bainbridge: Obama is Pro-Business? Tell it to the Gulf Coast
Obama imposed an arbitrary six month drilling moratorium on the Gulf and appointed a study commission rigged with anti-drilling ecomentalists. Predictably, the owners of oil rigs are going to move to places like Brazil, Africa, and so on where they’re allowed to work. The economic damage to the Gulf region is thus compounded. It’ll take years for the Gulf oil industry to recover. It’ll take years for the Gulf economy to replicate the high-paying jobs associated with the energy sector. And it’ll take years for the US to match the lost domestic production.