Gulf Oil Spill Clouds Future For Oilfield-Service Companies
18 Maio 2010 - 6:47PM
Dow Jones News
The massive oil spill in the U.S. Gulf of Mexico, which has
resulted in a temporary ban on new drilling, is clouding the
immediate future for oilfield-service providers--but could be
profitable for them in the long term.
Investigations into the events surrounding an April 20 explosion
and fire that sank the Transocean Ltd. (RIG) rig Deepwater Horizon
will likely lead to more strict regulation of the U.S. offshore
drilling industry, ratcheting up costs and safety standards. This
increased scrutiny has the potential to increase the role that
oilfield-service providers, which provide project management and
technological support to energy companies, play in drilling
projects. But at the same time, the extent of the new regulations
and increased delays for new projects could weigh on
service-company profits in thenear future.
"I don't think in the near term this is good for service
companies or the industry because operations are disrupted," said
Gene Shiels, a spokesman for Baker Hughes Inc. (BHI), which
provides directional drilling services and drilling fluids for
offshore drilling projects.
But Shiels added that in the long term, heightened standards for
back-up systems or requirements to add more equipment to existing
rigs could create opportunities for service companies.
Companies that could benefit are Schlumberger Ltd. (SLB) and
Halliburton Co. (HAL), which provide equipment and services for
offshore drilling.
Fadel Gheit, an analyst with Oppenheimer & Co. in New York,
said service providers "will have more frequent interactions with
the operator." Gheit noted that those oil and gas producers would
have to pay for interactions.
The increasing uncertainty affecting offshore drilling casts an
unexpected shadow on the sector's fortunes, which rode high even
amid the recent recession due to oil companies' pressing need to
grow their dwindling energy output. Drilling contractors such as
Transocean and Noble Corp. (NE), used to charging nearly half a
million dollars a day for contracting out each of their hi-tech
drilling rigs, are already facing more stringent safety
inspections. Contractors also face an immediate threat from the
spill itself as it expands across the Gulf and surrounds more
drilling rigs, which could force some to declare force majeure and
cease operations in the area, say analysts with Tudor Pickering
Holt. Transocean couldn't be reached for comment, and a Noble Corp.
spokesman said it was too early to speculate on the long-term
effects of the spill on the industry.
In the near term, drilling contractors and service companies
also face a moratorium on new drilling permits until the U.S.
government completes an investigation of the Deepwater Horizon
incident. That review is expected by May 28, but it's unclear
whether the ban will be lifted then.
"We don't know what this moratorium is going to do and how long
it is going to last," said Bill Herbert, an analyst with the
Houston-based energy investment bank Simmons & Co.
-By Jason Womack, Dow Jones Newswires; 713-547-9201;
jason.womack@dowjones.com
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