Sunday, July 11, 2010

"We greatly regret the loss of U.S. jobs that will result from this rig relocation."


Big thanks to Barry lObama for fucking us just a little bit more than we've already been fucked.

Exodus of deepwater rigs from GOM is underway

The exodus of deepwater rigs from the Gulf of Mexico as a result of the Obama administration moratorium on deepwater drilling is underway.

Diamond Offshore Drilling, Inc. (NYSE:DO) yesterday announced that it has entered into a term contract ending June 30, 2011, plus option, with Burullus Gas Company S.A.E. that will immediately mobilize the Ocean Endeavor from the Gulf Of Mexico (GOM) to Egypt.

Diamond Offshore President and CEO, Larry Dickerson, noted, "With new contracting severely restricted in the GOM as a result of the uncertainties surrounding the offshore drilling moratorium, we are actively seeking international opportunities to keep our rigs fully employed. This new contract for the Endeavor will help us preserve backlog, and will allow the previous operator of the rig to satisfy its contractual obligations which extended until June 30, 2011. We greatly regret the loss of U.S. jobs that will result from this rig relocation."

The new contract, combined with a $31 million early termination fee paid by the previous operator of the rig, is expected to generate combined maximum total revenue of approximately $100 million.

The Ocean Endeavour is a semisubmersible nominally capable of drilling in 10,000 ft water depths. It is one of several rigs on which Diamond Offshore customers have sought to exercise force majeur clauses in their contracts.

Diamond Offshore gave the details of the rigs and contracts in question in an 8K filing with the SEC last week.


Jack said...

So the rig owners who've been playing fast and loose with safety procedures aren't to blame? Or an industry with a history of playing fast and loose with said regulations *while* lobbying to remove any regulation whatever - they aren't to blame either?

It's the President's fault for trying to enact a moratorium to determine how safe these operations are? I mean, hell, it's only the worst ecological disaster in US history. It's only playing unholy hell with the economies of the gulf. Economies that go far beyond oil operations.

A moratorium makes just as much sense as grounding aircraft of a certain model when, after a major crash, NTSB suspects a major structural defect. The disaster here is far far more serious, and it needs to be looked into very closely. This is a prudent reaction to a major catastrophe.

What would you say if he did nothing, and another rig blew up? What would talk radio say?

If a rig can't be operated safely - and this ain't an act of god - it shouldn't be allowed to operate in US waters. In the service we were told that "complacency kills - arrogance murders" and this disaster smells of arrogant complacency and contempt for saftey.

This careless, recklessness, has cost the US taxpayers, it's businesses, and it's national environment incalculable amounts of money. Not to mention the lives lost on that rig, each of which is priceless.

No one seriously talks about a permanent ban, despite what talk radio says. It ain't in the policy cards and Obama himself flatly states that's not on the table. Not. Gonna. Happen. A small number of interest groups advocates for it, but until there's something to replace oil on the table - it's not going to happen.

I'd say if you can't do business in way that's going to avoid causing this kind of damage - you don't deserve to be in business. Which I point out, is exactly what free-market/moral hazard ideology says should happen.

Of course, no politician is contemplating putting the careless operators out of business. I guess all that "free-market/moral hazard" stuff is just for the poor then? (It sure as hell ain't for the economy-wrecking-gambling-parlor banks, which the Bush admin bailed out, I might add).

Nope, that Mr. Barry Hussein wants to regulate them more... So they maybe, possibly, consider following their own safety procedures, if that's not, you know, too much of a bother for em. How is that not prudent or responsible? Or dare I say it, conservative?

Now there's MORE than enough blame to spatter onto both sides of congress. Both sides of the aisle have been taking money to look the other way on basic safety standards and gutting regulation. And lets face it, Mineral's Management and Dept of the Interior have been unfunny jokes for decades. But the President can't be fairly blamed for wanting a temporary moratorium here.

It's another pattern of corruption, carelessness and greed costing ordinary people their lives and livelihoods. And that's a wider situation that has involved congress and corporate entities for decades. In the '20's it was mines, textile mills, railroads and big steel - doing exactly the same sort of thing.

I understand the anxiety about jobs, all too well right now, but pinning it on a President isn't accurate. This isn't even "big government," it's power and money corrupting the people who are supposed to keep the game relatively honest.

Anonymous said...

Yes - I'm going to just say bravo Jack. Exactly what I was going to say.

Paul, Dammit! said...

Well, if this was a case of banning ultra-deepwater exploratory drilling, I would agree. The problem here, using your airplane analogy, is that a temporary ban on high-risk or deepwater drilling wasn't passed. A ban on ALL offshore drilling was passed. This is like shutting down all lower-48 US air traffic because of an accident involving an Airbus liner.
An even more fit analogy would be the 747 wing stress-crack recall earlier this year. We didn't shut down all air traffic in a region for that. The US Government supported a shutdown of 747's until inspections could be made. Instead, we now have just over 50% of the semi-submersible rigs in the Gulf in the process of being repositioned in other waters. That kind of infrastructure doesn't come back without paying for the opportunity costs.

Obama's people have thrown out the baby with the bathwater, in my opinion, to attempt a punt at their having no ability to blame anyone but themselves for giving a ditto to these regulations prior to the accident.
I'm of the opinion that every aspect of the federal response to this disaster has been crafted for maximum political gain, not the elimination of pain and suffering. The fact that no one is willing to stand up and jump under the bus for having allowed this is understandable. What I loathe is that the response has been sweeping, not for practical reasons, but purely so the lowest common denominator will see that the Prez is on the scene.

The Cessna's don't need to be shut down, and neither do helicopters.