Instant View: Reaction to lifting of U.S. deepwater drilling ban

NEW YORK (BestGrowthStock) – The Obama administration on Tuesday lifted its ban on U.S. deepwater drilling weeks ahead of its November 30 deadline.

The Interior Department said drilling can resume once companies comply with new drilling rules and show they have adequate blowout containment resources.

Following are comments from oil companies, analysts and oil traders on the impact to drilling and futures markets:

QUOTES:

GENE MCGILLIAN, ANALYST, TRADITION ENERGY, STAMFORD, CONNECTICUT:

“Until the market knows exactly what steps need to be taken to take advantage of this decision to lift deepwater drilling ahead of schedule, the market will not react much to this news.

“Today people are trying to see whether the recent rally continues to have momentum and has looked at the broader financial markets for guidance. There may be other factors being awaited, such as the weekly inventory data, which will come later than usual.”

MARK ROUTT, SENIOR STAFF CONSULTANT, KBC ADVANCED TECHNOLOGIES, HOUSTON

“Obviously, it’s welcome news, but uncertainty remains before it’s going to have a practical impact. And that uncertainty itself can lead to rigs moving away or companies pursuing opportunities elsewhere. We continue to have a cloud over what’s going to happen here because of the permitting issue.”

ANTOINE HALFF, FIRST VICE PRESIDENT, DEPUTY HEAD OF RESEARCH, NEWEDGE GROUP, NEW YORK

“I think it is not a surprise, it was widely expected in the market. I think the perception was an indefinite moratorium applying across the industry did not make sense. But it’s clear that the BP problems in the Gulf means long-lasting changes for the industry.

“On the regulatory front, I think we should expect a tightening of regulations looking forward, but I think it’s safe to say the industry will be much more vigilant in self-regulating and in making sure it minimizes risks and has procedures in place to mitigate any unforeseen problem. However, formally lifting the moratorium is meaningless if the permits don’t follow.”

MURPHY OIL SPOKESWOMAN MINDY WEST:

“The moratorium is not the issue. Getting permits to do work of any kind in the Gulf is the issue. Just because the moratorium is lifted does not mean business as usual for any of us.

“We still have no visibility into future requirements, permitting, timing, oversight, etc. So projects will continue to be delayed until those things are resolved. No one is going to be willing to make rig commitments without assurance of being able to pursue an uninterrupted work program. We are a long way from that — maybe a year or more from that.”

TOM BENTZ, BROKER, BNP PARIBAS COMMODITY FUTURES, INC, NEW YORK, NY

“There has been a lot of bullish mentality out there. It’s not affecting supply immediately but it is something a lot of companies were looking at long term with long-term production. This could loosen up some of this bullish feeling. But I don’t really know if there is a direct effect on the prices on the futures market. In day-to-day action, it is really not a market mover.

GARY LUQUETTE, HEAD OF CHEVRON’S NORTH AMERICAN EXPLORATION AND PRODUCTION DIVISION

“We look to the BOEM to issue permits in a timely manner so work can resume without undue delays. The Gulf of Mexico continues to hold great potential, and we are ready to return to our work of exploring for and producing America’s own energy resources.”

STATEMENT FROM SHELL OIL

“There is a difference between lifting the moratorium and securing the drilling permits needed to return to work. It’s imperative to ensure agencies have the capacity to process the back log of drilling permits in a timely manner and consistent with the new safety rules.”

Instant View: Reaction to lifting of U.S. deepwater drilling ban