Deep Water Oil Drilling Rigs Leaving the Gulf Region
By Rod Pennington
Faced with uncertainly and a clearly hostile Obama Administration, deep water oil drilling rigs are starting to pack up and move out of the Gulf of Mexico. On Friday, the CEO of Houston area Diamond Offshore, Larry Dickerson, announced, “As a result of the uncertainties surrounding the offshore drilling moratorium, we are actively seeking international opportunities to keep our rigs fully employed.”
Diamond Offshore also announced that the deep water rig “Ocean Endeavor” is leaving immediately for Egypt. Dickerson said. “We greatly regret the loss of U.S. jobs that will result from this rig relocation.”
Devon Energy Corporation, which had been leasing the Endeavor, paid Diamond a $31 million dollar early termination fee to get out of its commitment. There are currently 33 deep water project which are affected by the ban. It is difficult to determine exactly how many jobs will be lost and if the rigs will ever return to American waters. Each rig generally has over 100 jobs on the actual platform at any one time and a large number of support people on shore.
Estimates have run as high as 10,000 high paying jobs could be lost.
In all likelihood this rig moving to friendlier water is just the first of such announcements. With President Obama pushing hard for a six month moratorium of this type of drilling, many other deep water drilling platforms will likely follow. President Obama, despite having already lost twice in the courts to continue the ban, has said his administration needed more time to review and implement new safety standards. He also wants to form a commission to investigate the cause of the April 20th BP oil spill.
Unlike government, businesses need to actually produce something more than the six months worth of talking President Obama is purposing. Congressman Kevin Bradley (R-TX) stated, “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 added, “I’m afraid this is the first of many rigs and many American jobs to leave the Gulf.”
Another member of congress, Rep. Pete Olson (R-TX) called for lifting the moratorium, said, “Once the rigs relocate, it could be a minimum of five to 10 years before they return.”
How much damage will be done to the region’s economy by the Obama Administration’s leisurely pace and open hostility will be clear in time. Meanwhile, with the November elections less than 4 months away, the question that needs to be asked, is all of this foot dragging by the president just preening for his base?
UPDATE: This morning on Fox News Sunday, presidential advisor David Axelrod submited his nomination for understament of the year. “These are rented rigs and they go from place to place, it’s not an optimal situation.”
President Obama was unavailable for comment. Despite vowing, “We will not rest until this crisis is solved,” he was on his third family vacation in the 13 weeks since the oil spill began on April 20th. “
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Posted by Rod Pennington
on Jul 11 2010. Filed under Business & Finance.
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Cut your nose off to spite your face. Does not make sense. In a free enterprise system this is what will happen with government stepping in and flexing it’s authroity. The reality is if the MMS had been doing it’s job this would of never happened. One term president. He was elected on a plateform of change, well that’s what we got just not what we expected. Two more years and where will be? Can he do much worse?
This is what happens when the MMS is bought and paid for by the industry it’s supposed to monitor. Under George Bush there was lax effort and cuts to the department that left it unable to do it’s job. When an industry is left to poliece its self you get oil spills and coal mine accidents. It’s a fact , BP had over 700 violations that went unchecked.
Is it that he is from a muslim country and wants us in the U.S, to be dependent upon those countries for our oil. Shame on You! He’s killing more american jobs ! How much worse can our economy get ? If the ban isn’t lifted those deep water rigs will leave and never come back to the U.S. The effects of those layofff’s will be close to 200,000. The grocery stores that supplies groceries, boats that bring supplies, helicopters that fly those men to work, construction workers, it goes on and on a domino effect. Just can’t believe with the economy so bad, Obama wants even more layoffs. Lift The Ban and Save Our Offshore Jobs , Keep the money in the U.S.
WHAT? The drilling moratorium never took place…it was shot down by some judge making a bit on the side.
Besides, the drilling ban was for deep water oil only and not shallow gas lines. Leave it to Fox to fabricate another story.
Why are they heading to Egypt? Have you seen Egypt lately that isn’t looking like a good investment unless you consider the goal of a revived Ottoman Caliphate. Don’t believe me look it up!