Offshore Drilling Moratorium

[Bigfoot]

This is energy related instead PM related, however I specifically would like input from our GIM investment team. Obama has placed a drilling moratorium on offshore wells until the government conducts an investigation as to what caused the explosion of the Deepwater Horizon platform.

Does anyone have any ideas on how long the drilling ban will last, and what the effects on the industry will likely be? If the government shuts down the Gulf of Mexico for a long time period, at least the portion in American waters, where could the drilling operators go to escape the ban? Will economic reality set in and force the government to back off and let offshore drillers go back to work?

[Anakin]

The offshore drillers are at work.

The moratorium is on new drilling, not existing drilling.

[StateofJefferson]

I would take a SWAG and guess that new offshore drilling will be help up for many years if not banned outright by the current administration in the USA

[Bigfoot]

"President Barack Obama on Friday directed that no new offshore oil drilling leases " http://www.workboat.com/newsdetail.aspx?id=4294990885

Hmm..."no new drilling" is a different from "no new drilling leases". I wonder if that means there is still new drilling on the old leases?

[Bigfoot]

"White House spokesman Robert Gibbs said the administration had taken swift action to ensure the safety of workers and the environment after the spill, which on Thursday measured one mile by five miles.

Asked whether Obama had second thoughts on offshore drilling, Gibbs said, "No."

Obama still believes that "we have to have a comprehensive solution to our energy problems," and the spill did not open up new questions about his drilling plan, he said.

"We've taken swift action to ensure the safety of those that are there and to ensure the safety to the environment by capping the exploratory well," Gibbs said.

"We need the increased production. The president still continues to believe the great majority of that can be done safely, securely and without any harm to the environment," he said.

Oil appears not to be flowing from the sunken drilling rig and damaged well in the Gulf of Mexico, but hope was dimming as search continued for 11 workers missing in the disaster, the U.S. Coast Guard said on Friday.

The Transocean Ltd Deepwater Horizon sank Thursday after burning since Tuesday following an explosion while trying to temporarily cap a new well drilled for BP Plc 42 miles southeast of Venice, Louisiana. "

http://www.reuters.com/article/idUSTRE63M3JV20100423?feedType=RSS&feedName=politicsNews

[Bigfoot]

"FBR Capital Markets analyst said Friday that shares of Transocean Inc. have been battered too harshly in connection with the oil spill in the Gulf of Mexico.

Robert MacKenzie thinks the stock has room to recover if the oil leak slows over the weekend. A containment box was placed over a blown-out well on Thursday in an attempt to slow the spewing crude. The leak started when a deepwater rig Transocean ( RIG - news - people ) owned exploded and sank on April 20. Shares have lost about a quarter of their value since the explosion. While he thinks that shares might still fall a bit over the coming weeks, MacKenzie thinks that Transocean's "ultimate financial cost...will be limited."

http://www.forbes.com/feeds/ap/2010/05/07/business-energy-us-transocean-analyst-note_7586408.html?boxes=marketschannelwires