US Offshore Drilling Set to Expire

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**Frazzled**

http://www.reuters.com/article/marketsNews/idINN2445732220080924?rpc=44

U.S. offshore ban's end a long-term plus to drillers
Wed Sep 24, 2008 3:01pm EDT
By Braden Reddall

SAN FRANCISCO, Sept 24 (Reuters) - Any benefits for oil services companies arising from an expiring federal ban on U.S. offshore drilling will be reaped in the long term given that many more hurdles will need to be cleared before it happens.

The 25-year-old ban looks set to expire next week after a temporary spending bill to keep the federal government running made no mention of offshore drilling, pushing the politically hot topic to the next president and new Congress.

Analysts said on Wednesday the industry would only benefit over many years from the largely anticipated lifting of the ban, as states decide whether to allow it off their coasts and seismic surveys find out if there is oil there to be drilled.

"It will be positive, but it will be more of an intermediate to long-term positive," said Kurt Hallead, oil services analyst at RBC Capital Markets. "You're talking about a multiyear process."

That dovetails with comments from Jeff Bingaman, chairman of the Senate's energy committee, who said it would take a substantial period to develop a leasing plan and that nothing dramatic with offshore drilling would happen on Oct. 1.

Congress must pass the stop-gap spending bill by Sept. 30, the end of the budget year.

Officials at leading oil services companies Halliburton Co (HAL.N: Quote, Profile, Research, Stock Buzz), Schlumberger Ltd (SLB.N: Quote, Profile, Research, Stock Buzz) and Baker Hughes Inc (BHI.N: Quote, Profile, Research, Stock Buzz) could not immediately be reached for comment.

Longdley Zephirin, an oil services analyst at Zephirin Group Inc, pointed out that the industry already faced an equipment shortage since demand in other parts of the world was strong.

"Oil services companies have been looking outside U.S. offshore for quite some time now," Zephirin said.

Republicans have pushed for an end to the ban as a way to relieve pressure on high gasoline prices, while Democrats had argued more drilling would not be a quick fix.

Shares of oil services companies, after rising sharply in line with a leap in crude prices on Friday and Monday, were down on Wednesday along with the price of oil CLc1.

Credit Suisse on Wednesday initiated coverage of the U.S. oilfield services and equipment sector with an "overweight" position, saying the sector had "years of growth ahead of it."

**lord_sutekh**

Can't say I'm happy about it at all, given how deeply Interior is in the pockets of Big Oil.

**Ahtman**

I've always wondered, if there is Big Oil, who is Little Oil? What are we comparing it to?

**Frazzled**

Er...Olive Oil?

**lord_sutekh**

"Little Oil" would be the non-transnational corporations in the oil business. There are still a few, but they're dwindling.

**Frazzled**

Blindingly incorrect. Its the Canola Oil Cartel. Even Rockefeller steared clear of those bandits!

**sebster**

It’s just the replacement term for ‘xyz industrial complex’. It lets you make it sound sinister and powerful, but you don’t end up sounding like a nut yourself.