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In Louisiana, hopes swell for quick drilling return

Wed, Jun 23 2010

* Drilling ban seen as second economic disaster

* If rigs go away, locals ask, "what will we do?" (For full coverage, click link.reuters.com/hed87k)

By Ernest Scheyder

BURAS, Louisiana, June 23 (Reuters) - For companies that operate giant floating oil rigs in the Gulf of Mexico, the fate of a U.S. drilling moratorium being contested in court could mean moving to other waters -- like Brazil or Russia.

For thousands of rig workers whose livelihoods have been disrupted by the ban, it is harder to do that kind of moving.

A federal judge in New Orleans overturned President Barack Obama's six-month moratorium on deepwater drilling on Tuesday, saying that just because BP Plc's (BP.L: Quote, Profile, Research, Stock Buzz)(BP.N: Quote, Profile, Research, Stock Buzz) rig failed, spewing oil into the Gulf, did not mean all deepwater rigs would. The White House said it will appeal. [ID:nN23161792]

The day after the ruling, many Gulf Coast residents were hopeful of a recovery in an industry that generates about 16 percent of Louisiana's gross domestic product.

"The six-month moratorium was the second economic disaster since the leak began," said George Pivach, who works at the Venice Port Complex that relies heavily on business from deepwater rigs.

"If a Chevron Corp (CVX.N: Quote, Profile, Research, Stock Buzz) or a BP can't drill in the Gulf, they move to Nigeria or somewhere else. The people of the Gulf can't do that."

The Venice port rents space to oilfield supply companies, such as Halliburton (HAL.N: Quote, Profile, Research, Stock Buzz). If the moratorium continues, those tenants could leave, Pivach said.

The deepwater drilling ban affects 38,000 workers, according to Louisiana Senator Mary Landrieu. As much as $16 million in rental fees are lost each day for all 33 deepwater rigs, never mind the millions in revenue that supply firms and other service companies lose.

The judge's decision brought "certainty back into drilling," Pivach said.

But that certainty might be delayed a bit longer.

Just hours after the ruling, Interior Secretary Ken Salazar said he still saw the need for a "pause" in deepwater drilling and would order a new moratorium within days.

Already concerns are mounting that shallow-water drilling -- in less than 500 feet (150 metres) of water -- might be halted if oil plumes from the leak move closer to shore.

"If that happens, I might have to hire a lawyer or apply for that BP fund," said Austin Williams, a welder on a shallow-water rig. "I don't want to but if I have to, I will."


Locals also say, ironically, that the areas around oil rigs offer some of the best fishing because sea creatures like to hide in the shade of the rig pylons.

"The fishermen are already taking a lick," said Tony Frickey of Venice. "If the oil companies leave, what will we do?"

Gerald Tompkins, who retired in 2006 after 26 years in oilfields with Hunt Oil, said deepwater drilling can be done safely when the proper precautions are taken. Three of his children work on shallow-water rigs in Louisiana's Barataria Bay.

"Most of the people around here don't want this moratorium," said Tompkins, who spent his days off from the oilfields as a commercial fisherman. "There are ways to still drill and be safe. You can have your cake and eat it too." (Editing by Chris Baltimore and John O'Callaghan)

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