Drill, baby, drill! The Obama administration has lifted the ban on deepwater oil and gas drilling in the Gulf of Mexico. Drilling stocks were significantly higher yesterday in hopes that demand will pick up, but let's not get too excited just yet.
Deepwater drillers Ensco
Industry members are skeptical that the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEMRE) can process permits in a timely manner to get drilling moving again. Shallow-water well permits have slowed dramatically since the explosion and spill in the Gulf in April, so investors shouldn't get too excited about drilling too soon. Michael Bromwich, director of BOEMRE, said he expects permits to be approved this year, and based on the fact the drilling ban was lifted a month earlier than expected, it appears the administration wants to move quickly. Time will tell how quickly that will be.
As deepwater drilling picks up, this should be viewed as a positive for all drilling companies but especially those like DryShips
The new rules will also be a positive for service providers like Halliburton
Who do you think will benefit most from the lifted ban and new regulations? Leave your thoughts in the comments section below.
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