By now you've read or heard that, amid industry skepticism, U.S. Secretary of the Interior Ken Salazar yesterday lifted the Obama administration's moratorium on deepwater drilling in the Gulf of Mexico. At the very least, there remain lots of zigs and zags that producers like Chevron (NYSE: CVX) and Shell (NYSE: RDS-A), along with their oilfield services compatriots, must navigate before Gulf activity levels can approach prior levels.
The moratorium on drilling in water depths exceeding 500 feet was instituted following an April explosion and fire aboard Transocean's (NYSE: RIG) Deepwater Horizon rig, which at the time was completing the Macondo well for British giant BP (NYSE: BP). In addition to 11 deaths, the explosion also resulted in the mother of all oil spills, with over 200 million gallons spewed into the Gulf.
As Salazar said in a news conference, "The policy position that we are articulating today is that we are open for business." But that hardly means that an armada of deepwater rigs will be digging for oil by week's end, or perhaps even prior to the end of 2010.
Before drillers and their Big Oil customers can plunge into the deep at full bore, they must conform to a host of new federal rules -- with additions on the way. Included will be the requirement that the operator's CEO must certify compliance with all regulations. And independent engineers must inspect and certify each well's blowout preventer and cementing standards. I've mentioned it before, but I think as makers of blowout preventers, Cameron (NYSE: CAM) and National Oilwell Varco (NYSE: NOV), along with other members of the services crowd are poised to benefit the most from these new regulations.
So you'd think there might have been dancing in the streets of New Orleans and other places affected by the drilling stoppage. And there might have been among the up to 12,000 workers estimated to have watched their jobs evaporate -- at least temporarily -- during the stoppage. But there is also is a drillship full of concern about what the removal of the deepwater halt really means for the industry.
Indeed, companies have experienced a severe slowdown in the permitting process in the shallow water in the face of the moratorium that was technically limited to depths deeper than 500 feet. And as Todd Hornbeck, CEO of Hornbeck Offshore Services (NYSE: HOS) noted, the devil's in the details. There remains much the industry doesn't know about the new rules and, perhaps more importantly, the altered permitting processes.
Nevertheless, the road to normalcy in the Gulf apparently has at begun. And moratorium or not, Fools would be well advised to closely watch the Gulfs future developments in regards to the changing global energy picture.
