U.S. to halt 33 exploration rigs in deepwater review
Thursday, May 27, 2010 at 06:23PM (Reuters) - The government's broad move to crack down on offshore oil safety will include the temporary suspension of 33 deepwater exploration rigs, Interior Secretary Ken Salazar said on Thursday after unveiling a series of measures in the wake of the BP leak.
Analysts warned that the halt, which was announced along with a six-month extension of its ban on new deepwater offshore drilling permits as well as a freeze on plans to explore parts of Alaska, represented the clearest regulatory threat to the immediate growth of oil production from the Gulf of Mexico.
Although the measures would not affect oil wells already in production, the 33 exploratory rigs are supposed to stop at the first safe opportunity and implement new safety measures before resuming operations, officials said.
That could increase costs and delay development plans for companies like Royal Dutch Shell and Apache, which are among the biggest Gulf explorers, while major contract drillers who could be left with idled rigs include Transocean and Noble Corp.
Salazar also told reporters during a conference call that new drilling would be allowed for wells in depths of less than 500 feet of water.
He said the Interior Department will also require that blowout preventers at offshore exploratory wells be certified to ensure they are working properly.
"These actions are all guided by the need to take a cautious approach to offshore oil and gas development, as we strengthen safety and oversight of offshore oil and gas operations," Salazar said.
Wood Mackenzie, an energy consulting group, said a six-month extension of the drilling ban would lose 80,000 barrels a day in U.S. oil production that was expected in 2011.
Separately, Salazar said a preliminary investigation shows problems with the cementing or casing, or both, at BP's offshore oil well may have contributed to last month's explosion of the Deepwater Horizon drilling rig leased by the company that killed 11 workers and caused the largest oil spill in U.S. history.
The U.S. government's moratorium on new drilling permits in the Gulf of Mexico delayed about $1.6 billion in oil and gas industry spending across the Gulf of Mexico region, according to Wood Mackenzie.
Reporting by Tom Doggett and Ayesha Rascoe
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