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Diamond Offshore Moves Another Rig Out of Gulf

Drill ship recovering oil from the ruptured British Petroleum oil well over the site in the Gulf of Mexico off the coast of Louisiana.
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Drill ship recovering oil from the ruptured British Petroleum oil well over the site in the Gulf of Mexico off the coast of Louisiana.

Diamond Offshore Drilling announced this morning they are moving a deepwater drilling rig, Ocean Confidence, to the Republic of Congoand have suspended a Gulf of Mexico contract with Murphy Exploration and Production Company.

The remaining one-year Gulf of Mexico commitment and new international commitment, according to the press release, are expected to generate approximately $234 million.

This comes after Diamond announced last week that it will "immediately mobilize" the Ocean Endeavor from the Gulf of Mexico to Egypt. According to the press release the new contract—combined with a $31 million early termination fee paid by the previous operator of the rig—is expected to generate a total revenue of $100 million.

The President and CEO of Diamond Offshore, Larry Dickerson, said, "With new contracting severely restricted in the GOM (Gulf of Mexico) as a result of the uncertainties surrounding the offshore drilling moratorium, we are actively seeking international opportunities to keep our rigs fully employed."

In terms of a moratorium on offshore drilling, the political fight is heating up. On Monday, the Obama administration issued a new order banning deep-water drilling until November 30. This comes after a federal judge last month blocked a previous White House six-month moratorium on new offshore drilling projects.

We'll keep you posted on the outcome.


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