It Begins… First Oil Rig Relocates From Gulf to Foreign Waters
Diamond Offshore announced on Friday that it will be the first company to relocate one of its oil rigs from the Gulf of Mexico to Egyptian waters due to the Obama Administration’s ban on drilling.
Diamond Offshore announced Friday that its Ocean Endeavor drilling rig will leave the Gulf of Mexico and move to Egyptian waters immediately — making it the first to abandon the United States in the wake of the BP oil spill and a ban on deep-water drilling.
And the Ocean Endeavor’s exodus probably won’t be the last, according to oil industry officials and Gulf Coast leaders who warn that other companies eager to find work for the now-idled rigs are considering moving them outside the U.S.
Devon Energy Corp. had been leasing the Endeavor to drill in the same region of the Gulf as BP’s leaking Macondo well, which has been gushing crude since a lethal blowout April 20.
But Diamond announced Friday it will lease the rig through June 30, 2011, to Cairo-based Burullus Gas Co., which plans to send the Endeavor to Egyptian waters immediately.
Devon is one of three companies that has cited the deep-water drilling ban in trying to ease out of contracts to lease Diamond rigs. Diamond, a drilling company, said it expects to make about $100 million from the deal, including a $31 million early termination fee it recovered from Devon.
On May 27, President Obama instituted a six-month moratorium on all drilling in water depths greater than 500 feet and stopped work on 33 Gulf deepwater exploration rigs, except under special circumstances. The president’s decision will force tens of thousands of Gulf Coast employees to lose their jobs.