Page 30: of Marine News Magazine (August 2011)

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30MNAugust 2011business has been steady as a result of the normal con- struction and maintenance work offshore that generally takes place during the summer months.?But, he said, activity is considerably slower than before the deepwater moratorium.? Fleet Operators owns and charters supply vessels for the offshore oil and gas indus- try. And Barousse said we're preparing for things to slow down tremendously once winter weather is upon us. The outlook is not very positive at the moment, and will be even worse by the end of the year.? GULFOILOUTPUTPROJECTED TODECLINECrude oil production from the federal Gulf of Mexico is expected to shrink from 1.64 million barrels per day in 2010 to 1.49 million bpd this year and 1.38 million bpd in 2012, according to the U.S. Energy Information Administration's short-term energy outlook, released in July. Gulf output should drop by 150,000 barrels a day this year and another 110,000 bpd in 2012. The EIA said this year's decline stems from lower pro- duction in existing fields, last year's drilling moratorium and a subsequent delay in issuing new drilling permits. Even before the BP spill and the drilling ban, the EIA expected Gulf oil output to fall this year. Issuance of Drilling Permits Lags Pre-Moratorium Pace Jim Adams, president and chief executive of Offshore Marine Service Association, an industry group in Harahan, La., said the Administrations approval rate for exploration and development plans is down 85% from pre-moratorium levels, and the number of drilling permits covered by exploration and development plans is off near- ly 65%. He cited a study called Restarting the Engine-- Securing American Jobs, Investment and Energy Security,? released by IHS CERA and IHS Global Insight in late July. Adams said "no industry can operate with that kind of shutdown.? He said the Obama Administration is sending rigs, boats and jobs overseas in an indefensible policy. OMSA represents more than 250 member compa- nies, including about 100 firms that own and operate marine-service vessels. The offshore marine industry remains in a state of crisis, almost as if the drilling mora- torium was never lifted, and the only relief from excess capacity is overseas opportunities,? Adams said. The Administration has strangled offshore drilling, and until that changes, we can't look for better times in the marine industry.? Adams said Washington has choked the Gulf shallow sector though it never had any significant spills. There's no reason that shallow water permits shouldn't be 100% of what they were in the spring of last year, but we're not even close,? he said. The Administration isn't interested in shallow-water or deepwater exploration.? OMSA sent a letter to President Obama in February complaining about suspended offshore drilling and its impact on marine industry jobs. We never heard back from the Administration and that's because they know we're right,? Adams said. According to OMSA, more than 50,000 wells have been safely drilled in the Gulf of Mexico over the past fifty years. PROBLEMSWITH RIGPERMITNUMBERSAdams said BOEMRE numbers on Gulf drilling per- mits are completely misleading. We need to know how many wells are brand new that will lead to exploration and how many wells are being re-permitted from last year.? Someone looking at BOEMRE's website might think that new wells are keeping pace with pre-moratorium levels, but they aren't, he said. He added that oil and marine industries need to be able to compare how many exploratory wells are permitted. It takes an average seven permits for a well to start producing,? he noted. In March, Senator David Vitter (R-La.) also sent a letter to U.S/ Interior Dept. Secretary Ken Salazar and BOEMRE direc- Utilization of mobile rigs in the Gulf stoodat 53.7% on July 22. Meanwhile, otherdrilling regions in the world are closer tofull capacity. In Europe and the Mediterranean, 96.3%of all platform rigs and 87.7% of mobilerigs were in use in late July.MV Grant Candies

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