Permit delays in gulf raising costs

Sept. 17, 2010 at 10:02 AM
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NEW YORK, Sept. 17 (UPI) -- Oil companies said the Deepwater Horizon oil spill, set off by a platform explosion April 20, has led to higher costs due to delays in obtaining U.S. permits.

The Wall Street Journal reported Friday that Total SA Chief Executive Officer Christophe de Margerie said: "People are talking about 20 percent more in delays. (Consequently), it will cost you 20 percent more to drill a well."

Chuck Davidson, CEO of Noble Energy Inc., said permits for well completion were also running into roadblocks, even though well completion was not a step included in a six-month U.S. moratorium on exploration drilling.

"The first completion permit had to be submitted nine times; the second one, six times," he said in reference to two separate projects.

"The moratorium may go away, but it will take a long time to get those permits on those projects going forward," he said.

The Journal said most of the 33 drilling platforms operating in the Gulf of Mexico had stayed put, despite uncertainty that began when the platform explosion killed 11 workers and oil began spewing into the gulf.

A favorable tax structure for companies operating in the gulf was keeping even idle rigs in place, waiting for the moratorium's end on Nov. 30, the Journal said.

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