Paula Dittrick
OGJ Senior Staff Writer
HOUSTON, July 23 -- The deepwater Macondo well blowout will not prove as detrimental to drilling in the Gulf of Mexico as the Three Mile Island accident proved for the nuclear industry, Douglas L. Becker, an oil services analyst with Bank of America, told an Oilfield Breakfast Forum on July 23.
Public distrust of the Mar. 28, 1979, accident at the Three Mile Island nuclear power plant near Middletown, Pa., stymied nuclear development in the US.
“The oil spill will have a lasting impact, but it’s not terminal. It’s not going to prohibit drilling for 30-40 years,” Becker told the forum hosted by Decision Strategies, a consulting firm that acquired RMI in 2008. RMI started the forum in 1994.
The blowout on Mississippi Canyon Block 252 resulted in an explosion and fire on Transocean Ltd.’s Deepwater Horizon semisubmersible, killing 11 people. BP PLC operates Macondo. A massive oil spill prompted the government to place a 6-month moratorium on new deepwater drilling in the gulf.
A federal judge in New Orleans overturned the first moratorium, and his decision remains a subject of appeals by the Department of the Interior. Interior Sec. Ken Salazar later imposed a second drilling moratorium based on technology and drilling configurations instead of water depth.
“Things changed on Apr. 20,” Becker said. “At the same time, economic growth started getting questioned,” in the US. Economic growth drives oil demand, which in turn drives demand and revenues for oil service providers.
Although he expects the gulf drilling moratorium will have “limited impact on the global oil market,” Becker said the current US rig count is unsustainable.
“We can see a 200 rig decline in the US over 6 months,” he said, adding he expects the anticipated rig count will start in the fourth quarter and continue into early 2011. He expects the rig count outside the US will be strong in 2011.
T. Jay Collins, Oceaneering International Inc. president and chief executive officer, also doubts that the worldwide rig count will be hindered. “US Gulf of Mexico drilling policy does not drive worldwide energy demand,” Collins said.
Oceaneering has seen a drastic decline in its business since the blowout. Early this year, Oceaneering was providing services on 29 drilling rigs in the gulf. As of July 9, it was providing services on 9 rigs.
In addition to the moratorium, Collins said he was concerned about the government’s drilling permitting process. “Right now it seems to be very confused,” he said of new deepwater exploration projects.
Oceaneering provided subsea technology expertise and also provided remotely operated vehicles that worked on the failed Deepwater Horizon blowout preventer and installed various caps and collection systems. Oceaneering equipment provides a video feed from the ocean floor.
Contact Paula Dittrick at [email protected].
