Chevron spokesman Mickey Driver said the company acknowledges the Obama administration's desire to fully understand the underlying cause of the oil spill, but that halting deepwater drilling will have lasting energy security and economic consequences for the U.S.
"We believe responsible drilling should be allowed to continue," Driver said. Exxon, Chevron and other companies are helping BP deal with the spill.
Offshore drilling contractors, which managed to weather most of the downturn in drilling that followed the recession, also stand to suffer. Switzerland-based Transocean, the world's largest offshore driller, gets 25% of its revenue from the U.S. Gulf, where it operates 14 rigs. Those rigs will receive a reduced "force majeure" rate because of the drilling ban, the company said Friday. Transocean shares have lost more than a third of their value, or about 38%, since the April 20 blast and recently traded at $57.11 apiece. Noble Corp. (NE), another large offshore driller, has seen its shares come down 30% since the incident, each trading at $29.19 on Friday.
Wood Mackenzie said the development of several existing oil discoveries in the area could also be jeopardized by delays and substantial cost increases resulting from new, stricter safety regulations. These delays and higher costs could defer as much as 19%, or 350,000 barrels of oil equivalent a day, of projected deepwater Gulf production in 2015 and 2016.
Wood Mackenzie said that a 10% increase in overall capital expenditure would drop the internal rate of return--a measure used by companies to compare profitability of investments--of deepwater Gulf of Mexico oil discoveries to 15% or less. This would put several of them close to, or below, the profitability rates required to proceed with a project, according to the report.
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