Offshore Drilling Update – 7.30.15

RBC Raises Forecasts For Offshore Drillers

RBC’s Robert Pinkard has raised earnings forecasts for offshore drillers Noble Corporation, Diamond Offshore, and Ensco. Transocean’s forecast remains the same, while Rowan’s was lowered by one cent per share.

Shell Oil Seeks To Begin Arctic Drilling

Shell Oil is sending drilling vessels to Alaska. A capping stack (a piece of safety equipment used in the event of a well blowout) must arrive before drilling can begin.

Shell has invested more than $7 billion in Arctic drilling preparations. Environmental groups remain opposed.

The Arctic wells Shell seeks to drill will be in shallow water, only 130-140 feet deep. This means the wells will be drilled under much less pressure than deep water wells like the one that precipitated the 2010 Deepwater Horizon spill in the Gulf of Mexico.

Still, the cold temperatures and other extreme conditions in the Arctic make drilling challenging, which has caused concern among many safety experts. These experts fear that drilling in dangerous conditions could lead to blowouts as well as offshore and maritime injuries.

Senate Seeks Additional Arctic Drilling Approval

A Senate bill lifting the U.S. oil export ban was recently proposed in the United States Senate.

Senator Lisa Murkowsi R-Alaska added a provision to the bill that would give oil companies like Shell, ConocoPhillips, and Statoil an extra 10 years to develop oil and gas leases in the Arctic. Typically oil companies must drill leases within 10 years lose the right to do so.

Murkowski’s bill seeks to extend the period to 20 years.

Already under consideration by the Bureau of Safety and Environmental Enforcement (BSEE) are “suspension of production” (SOP) requests from Shell and Statoil. These requests would extend the leases for several years.  But BSEE rejected a similar request from ConocoPhillips back in 2013.

If the leases lapse, the acreage could be auctioned again, which could make the U.S. Government more money.

Most Noble Rigs Under Contract

Noble announced at the end of July that most of its floating drilling vessels are now under contract, including:

• Bob Douglas (Drillship — 10,000 ft water depth)
• Bully I (Drillship – 8,200 ft water depth)
• Bully II (Drillship – 8,250 ft water depth)
• Discoverer (Drillship – 1,000 ft water depth)
• Don Taylor (Drillship – 10,000 ft water depth)
• Globetrotter I (Drillship – 10,000 ft water depth)
• Globetrotter II (Drillship – 10,000 ft water depth)
• Sam Croft (Drillship – 10,000 ft water depth)
• Tom Madden (Drillship – 10,000 ft water depth)
• Noble Clyde Boudreax (Semisubmersible – 10,000 ft water depth)
• Noble Danny Adkins (semisubmersible – 12,000 ft water depth)
• Noble Dave Beard (Semisubmersible – 10,000 ft water depth)
• Noble Jim Day (semisubmiersible – 12,000 ft water depth)

The following Noble rigs are not currently under contract:

• Noble Homer Ferrington (semisubmersible 7,200 ft water depth – stacked)
• Noble Paul Romano (semisubmersible – 6,000 ft water depth—shipyard)
• Noble Max Smith (semisubmersible—7,000 ft water depth—idle)

Drilling Offshore North Carolina?

At the end of July 2015, researchers, government officials, regulators, and local residents are gathering to discuss offshore drilling on the North Carolina coast.

House Speaker Calls For End To Crude Oil Export Ban

Senator John Boehner is calling for an end to crude oil export ban implemented in the 1970s. The ban was implemented during the Oil Crisis when it was believed that the U.S. might run out of oil.

But new techniques like fracking have greatly increased the available supply. Representative Joe Barton (R-Waco, Texas) has long been leading the charge to open up U.S. drilling to international export. He believes the bill will be considered sometime in the fall of 2015.

Oil refineries are the primary opposition to lifting the ban, because doing so would result in domestic oil prices rising, which in turn would cut into their profits.

Texas Offshore Injury Lawyers Assist Injured Workers

Morrow & Sheppard are privileged to represent maritime and offshore workers who have been injured throughout the Gulf Coast, particularly offshore Texas and Louisiana.

If you or a loved one has been injured, please contact us now to discuss your case during a free, confidential consultation.