There has been some recent chatter about the Feds lifting the current deepwater drilling moratorium ahead of the Nov. 30 expiration date. This got me wondering: How many rigs could actually get back to work relatively quickly?
In late May, the Bureau of Ocean Energy Management, Regulation and Enforcement issued a set of safety requirements known as NTL-05. One key requirement is that floating drilling rigs (and rigs located on floating platforms) get their blowout preventers, or BOPs, recertified by an independent third party.
On its second-quarter conference call, Ensco
According to the BOEMRE, five more floating rigs have been recertified: three owned by Diamond Offshore
Twenty-five exploratory wells were shut down following the imposition of the moratorium, so this group of recertified rigs represents a small fraction of the Gulf deepwater fleet. BOP recertifications look like a minor hurdle compared to other existing and potential regulatory requirements, however.
Once the moratorium is lifted -- whether it comes next week or next month -- operators are going to face an uphill battle when it comes to securing new permits. Noble Energy
It's hard to handicap how long it will take for the business of deepwater drilling to get back to its pre-spill pace, but I'm beginning to think that this will be more of a 2012 or 2013 event at the earliest. Next year will not resemble business as usual. That doesn't mean you should avoid drillers and exploration and production companies with deepwater exposure, as some are attractively priced. I wouldn't rush out and buy these stocks willy-nilly when the moratorium lifts, however.