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Benefits from Lifting the Drilling Ban

The Obama administration's lifting of the drilling moratorium in the Gulf of Mexico (GOM) was expected, but it is nonetheless a positive for GOM exploration and production companies.

While it is also a modest positive for deepwater drillers (those wells abandoned will be resumed (they were 17 or 18 of them)), the new wells will have a much longer permitting process. That will likely increase costs for the drillers.

However, it should be a positive for oil service firms. Why? Because the drillers will require more service. So instead of one safety check, service firms like Schlumberger or Halliburton will do two safety checks of the drillers.

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