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Letter From The Editor
Letter From The Editor
Edtitorial
We would all agree that a disaster of Biblical proportions was in the making offshore Louisiana on April 20 -- both aboard and far below Transocean’s Deepwater Horizon semi-submersible drilling rig. Tragically, a massive explosion and fire, for reasons still under investigation, killed 11 workers and injured 17, 3 critically. The rig eventually sank in 5,000 feet of water as the exploration well drilled by the Horizon continued to spew copious amounts of oil and gas into the Gulf of Mexico.
All we really know a month after the disaster is that a crucial safety device called a Blowout Preventer or BOP somehow failed. There seems to be little doubt about this, at least from the viewpoint of the field operator, BP.
Sometimes we forget just how important E&P independents are to the Gulf of Mexico, until the economy tanks or the feds slap a pointless moratorium on deepwater drilling, while making it exceedingly difficult to do business in shallower waters of the continental shelf, which many independents call home.
There are many independents who are suffering from government over regulation caused by the BP oil spill. But I was particularly disappointed to see that Plains Exploration & Production Co., a partner in one of the most intriguing plays (Davy Jones) on the shelf, decided to focus more onshore, targeting for sale $1 billion to $2 billion in joint venture properties and other offshore assets in the region. Unfortunately, industry analysts now expect that rising insurance costs and other expenses associated with the spill and new regulations will push many of the smaller oil and gas producers out of the U.S. Gulf.