Deepwater oil drilling gaining momentum

June 27, 2013 at 8:48 AM

HOUSTON, June 27 (UPI) -- Deepwater drilling for oil and natural gas reserves has returned to the level before the BP oil spill in the U.S. Gulf of Mexico, analysis shows.

The U.S. government imposed a temporary moratorium on deepwater drilling in the wake of the Gulf of Mexico oil spill in 2010. The failure of the deepwater Macondo well triggered an explosion on the Deepwater Horizon oil platform, killing 11 rig workers and resulting in one of the worst accidental offshore oil spills in the history of the industry.

Energy consulting company Wood Mackenzie, which has offices in Houston, said deepwater drilling returned to its pre-spill level last year and should experience "bullish growth" in the coming years. Wood Mackenzie expects global drilling activity to grow by 9 percent annually in the next few years.

"This will require the longest period of deepwater rig construction to date, representing a change for the deepwater sector from cyclical to sustained growth," Malcolm Forbes-Cable, the report's author, said in a statement Thursday.

Wood Mackenzie says deepwater activity eclipsed onshore and shallow-water drilling in the last decade. Drilling in arctic reserves is expected to increase steadily but at a much slower pace when compared to deepwater activity.

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