Shallow-water drillers fear for their businesses

A post-oil-spill delay in issuing new federal drilling permits in the shallow waters of the Gulf of Mexico, at first an inconvenience, has suddenly emerged as a real threat to the future of companies in the business, industry executives said Wednesday. While no one is talking about bankruptcy filings, shallow-water drilling contractors say the holdup in permitting is cutting into the bottom line a bit more each day they have rigs sidelined and idled workers on payroll. "At some point," said Randy Stilley, CEO of Houston's Seahawk Drilling, "it becomes a viability issue." So far, permitting delays have idled 14 of the 46 available jackups in the Gulf and forced offshore companies to cut several hundred jobs. Each rig employs about 100 workers and supports many additional indirect jobs at supply boat companies, oil field services companies and other businesses. If the situation doesn't change, 25 rigs will be idle by the end of August and 30 by the end of September as existing permits expire, according to figures provided by the Shallow Water Energy Security Coalition, an industry group formed in May to call attention to the issue...more