Analysis: Oil firms hurt by Gulf spill welcome back drill rigs

Tue Apr 10, 2012 8:12am EDT
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By Braden Reddall

NEW ORLEANS (Reuters) - Gulf of Mexico oil drillers will be busier this year than at any point since the BP (BP.L: Quote) oil spill in 2010 that upended their industry and soiled their reputation along with parts of the marshy Louisiana coast.

Eight more deepwater rigs are expected in the Gulf this year, based on what oil companies tell contractors including Transocean RIGN.VX, Ensco (ESV.N: Quote) and Seadrill (SDRL.OL: Quote). Such an influx would bring the active deepwater count to 29, just short of the level before the well blowout two years ago this month that killed 11 people and destroyed a Transocean rig.

The rebound cannot come soon enough for companies that rely on the drilling business. While the increasingly varied economy of southern Louisiana may be recovering, no sector pays like oil and gas. Energy has been part of the state's commercial fabric since the first offshore boom during the 1970s oil crisis, when crude was much cheaper than it is now.

More Gulf activity could help President Barack Obama, ahead of the November 6 election, as he tries to fend off charges from some Republicans and the industry that drilling has not recovered after the spill due to new rules and slow permitting.

The Obama administration imposed a four-and-a-half-month moratorium on deepwater drilling after the oil spill. That gave way to a longer spell when regulators grappled with stricter rules and allowed little drilling to take place - oil men deride that period as the "permitorium."

In New Orleans, a city already enlivened late last month by the NCAA college basketball championship at its colorfully lit and now Mercedes-sponsored Superdome, the mood at a big annual oil conference across town was notably brighter.

"Our customers still see the Gulf of Mexico as an attractive place to do business," said Steven Newman, head of Transocean, the world's largest rig contractor. "We view the Gulf of Mexico today as a net importer of rigs, rather than a net exporter."

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Unused oil rigs sit in the Gulf of Mexico near Port Fourchon, Louisiana in this August 11, 2010 file photo. G REUTERS/Lee Celano/Files