Fight goes on for local drilling companies

September 17, 2010 5:20:22 PM PDT
The fight is far from over for drilling companies dealing with a deepwater drilling moratorium imposed after April's deadly rig explosion in the Gulf of Mexico. This comes as BP prepares to permanently seal the blown-out well which led to the worst oil spill in history. BP expects to completely seal that blown-out well by Saturday. A relief well intersected with the blown-out well Thursday, and now crews are pumping cement into it. It means the worst of the oil spill is over for a lot of Gulf coast residents, but the struggles continue for drilling companies dealing with changes for the industry.

The deepwater moratorium keeps companies from starting new projects like BP's blown-out well. It's not supposed to affect the hundreds of companies that drill in shallower water, but it is. And despite rosy government jobs forecast, the Houston reality isn't so good.

You can't see them from his headquarters in the glass towers of Greenway Plaza, but 75 percent of Randy Stilley's expensive drilling business is sitting in the shallow Gulf of Mexico rusting.

"Fourteen jack-up drilling rigs sitting offshore with no work," he said.

The company owns 20 shallow water drilling rigs. Fourteen of them can't drill because the feds have slowed down the permitting process that they can't get permits.

"During the first quarter of the year, we had close to 900 employees, " he said. "We're down to 600 today."

Next door at Hercules Offshore, there are no layoffs, but the picture's not much better.

"It's a brass knuckle street fight to keep our people employed," said Jim Noe of Hercules Offshore.

With 5 of their 11 rigs sitting idle, they're paying people to work their tans and repaint their rigs.

"We have almost 200 workers sitting on rigs, sitting on the payroll without a job to do," he said.

That's quite a difference from what the Obama administration said Thursday from Washington. A report from the U.S. Commerce Department told Congress, "Any losses have not been large to date"

They told the Senate early estimates of massive job losses were way off, now estimating that, "The six-month moratorium may temporarily result in up to 8,000 to 12,000 fewer jobs in the Gulf coast."

"I think it's a lie," said Stilley. "I think it's false."

The Houston oil industry differs with the feds and so does Woodlands Congressman Kevin Brady.

"There is absolutely nothing to celebrate," he said. "There are real job losses getting larger every day the moratorium persists."

Brady says the feds have stopped issuing permits for any Gulf business affected by the moratorium or not, and that even when it's officially lifted, the industry may not get any healthier.

"We're trying to figure out how to survive as a company," said Stilley.

There are 46 rigs that work the shallow water in the Gulf of Mexico. By the end of this month, 28 are expected to be idle and 3,100 people laid off. Without change to loosen up federal permitting, industry estimates suggest by Halloween, there could be 4,100 direct jobs lost.


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