NYT - As President Bush calls for repealing a ban on drilling off most of the coast of the United States, a shortage of ships used for deep-water offshore drilling promises to impede any rapid turnaround in oil exploration and supply.
Demand is so high that shipbuilders, the biggest of whom are in Asia, have raised prices since last year by as much as $100 million a vessel to about half a billion dollars.
"The crunch on rigs is everywhere," said Alberto Guimaraes, a senior executive at Petrobras, the Brazilian oil company that has discovered some of the most promising offshore oil but has been unable to get at it.
"Almost 100 percent of the oil companies are constrained in their investment program because there is no rig available," he said.
As a result, drilling costs for some of the newest deepwater rigs in the Gulf of Mexico -- the nation's top source of domestic oil and natural gas supplies -- have reached about $600,000 a day, compared with $150,000 a day in 2002.
These record prices have spurred a new wave of drill-ship construction. This boom could lead to renewed offshore oil exploration that would eventually bring more supplies to the oil market, and push down prices.
Already, 16 new drill-ships are scheduled to be delivered to oil companies this year -- more than double the number delivered over the last six years combined. In fact, 75 ultra-deepwater rigs should be delivered from 2008 to 2011, according to ODS-Petrodata, a firm that tracks drilling rigs.
Gee, I guess it wasn't such a good idea for the FEDERAL GOVT TO GET INVOLVED IN RESTRICTING THE MARKET BY DENYING SUPPLIES TO SUCH AN EXTENT THAT NO EXPLORATION AND DRILLING SHIPS ARE AVAILABLE.
Apparently the USA doesn't even HAVE a shipyard which can or is building these ships.
With the exception of denying monopolies and cartels (one of the reasons oil is the way it is) is there any involvement in the marketplace the federal govt can have which does not hurt us all?
Shipyards from South Korea to Norway are working overtime to meet a huge influx of orders.
Robert L. Long, the chief executive office of Transocean, the world's largest drilling company, said he has nine deepwater rigs under construction, eight of which are already under contract for periods ranging from four to seven years once they leave the shipyards. He expects to receive the ships between the beginning of 2009 and the end of 2010.Transocean believes the deepwater market will continue to be constrained until at least 2012. Over three-quarters of the drill-ships currently under construction have already been contracted to oil companies eager to benefit from triple-digit oil prices, Mr. Long said
Brazil stunned the oil world when it announced the discovery of a vast oil field 200 miles south of Rio de Janeiro last November, turning the country's deep blue waters into the world's most exciting oil frontier. Energy experts said the field could turn out to be just a small part of the largest oil discovery in 30 years.
But seven months later, the problem is still how to retrieve it. Petrobras has only three rigs capable of drilling in waters that exceed 6,500 feet, like the sites of the new fields.
Rep. Nick Rahall (Rocket Scientist-D-WV),
Chairman of the Resources Committee
"You cannot drill your way out of this."