The moratorium on new offshore drilling as a result of the Deepwater Horizon accident is stalling a number of projects in the Gulf and could result in job cuts.
Bloomberg noted that BP, Petrobras, Cobalt International Energy and Plains E&P are just some of the oil and gas exploration firms that have had projects in the Gulf or coastal California suspended as federal investigators probe the cause of the BP spill.
At yesterday’s annual shareholders meeting, ConocoPhillips’ CEO Jim Mulva said that the spill is likely to result in delays in further exploration and production, including appraisal of BP’s big Tiber oil discovery in Keathley Canyon southeast of Houston, in which ConocoPhillips holds an 18 percent stake.
The delays could have a disastrous effect on the industry. According to Bloomberg:
An estimated 7,500 jobs on offshore drilling rigs in the Gulf of Mexico may be lost if the ban on new well permits continues through July 1, said Lee Hunt, president of the International Association of Drilling Contractors in Houston. Another 7,500 jobs may be lost in support industries such as caterers, pipe yards and communication companies, he said.
There are about 75,000 offshore jobs in the Gulf of Mexico, according to the association.
“I think within two to three weeks, you’re going to see significant layoffs and unemployment in the whole offshore infrastructure industry,” Hunt said. “That’s going to affect upper Texas, the Gulf Coast, all of Louisiana and Mississippi coastal employment.”
Houston-based Cobalt has two deep-water prospects on hold whole it awaits permits. Plains Exploration said its plan to drill off California has been squashed as Governor Arnold Schwarzenegger withdrew his support for offshore drilling after the spill.
And the ban is having a bigger impact on operators in shallower water, where wells tend to be constructed faster, Bloomberg said.