Tags: US | Gulf | Oil | Spill | Stocks

Oil Companies' Shares Drop After Moratorium Ruling

Tuesday, 22 Jun 2010 02:58 PM

Shares of oil companies and drillers tied to the spill in the Gulf of Mexico fell with the broader market Tuesday after a judge blocked a six-month moratorium on new deepwater drilling projects because of the massive Gulf oil spill.

President Barack Obama's administration had halted the approval of any new permits for deepwater drilling and suspended drilling at 33 exploratory wells in the Gulf.

Several companies that ferry people and supplies and provide other services to offshore drilling rigs had asked U.S. District Judge Martin Feldman in New Orleans to overturn the moratorium. Feldman says in his ruling that the Interior Department failed to provide adequate reasoning for the moratorium.

The Obama administration has promised to appeal.

Analyst Phil Weiss of Argus Research said it is too soon to know how the ruling will affect oil companies and drillers.

"It seems to be more wait and see than anything at this point," he said.

There will at least be new rules companies will have to comply with when activity resumes, he said.

The American Petroleum Institute, the national trade association for the oil and gas industry, welcomed the judge's ruling. "The moratorium was an initial reaction to concerns about the safety of offshore oil and natural gas operations," API said. "However, an extended moratorium would have a tremendous impact on the nation's energy security — and cause significant harm to the region of the country that was already suffering from the spill — without raising safety or improving industry procedures."

Shares of British oil company BP, which owns 65 percent of the well spewing oil into the Gulf, dropped 65 cents, or 2.1 percent, to $29.68, near a 14-year-old low for the shares in U.S. trading.

Shares of Anadarko Petroleum, which owns 25 percent of the well, fell $1.85, or 4.3 percent, to $41.60 while shares of Transocean, the company that owned the rig that exploded and sunk in the Gulf, dropped $1.47, or 2.7 percent, to $53.44. Shares of Cameron International, the maker of the failed blowout preventer meant to stop oil from coming out of the well, fell $1.40, or 3.8 percent, to $35.83.

Hornbeck Offshore Services, which filed the lawsuit seeking to block the moratorium, saw its shares drop 21 cents to $15.35. Baker Hughes shares fell $2.20, or 5 percent, to $41.89.

Shares of other offshore oil drilling companies also remained lower.

Diamond Offshore Drilling shares fell $1.84, or 2.8 percent, to $62.90. Shares of Noble Corp. lost $1.32, or 4.2 percent, to $30.03, while shares of Ensco declined by $1.06, or 2.6 percent, to $39.68.

Shares of oil service companies also were off Tuesday. Schlumberger dropped $1.81, or 3 percent, to $58.52. Shares of Halliburton fell 97 cents, or 3.6 percent, to $26.08.

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Shares of oil companies and drillers tied to the spill in the Gulf of Mexico fell with the broader market Tuesday after a judge blocked a six-month moratorium on new deepwater drilling projects because of the massive Gulf oil spill. President Barack Obama's administration...
US,Gulf,Oil,Spill,Stocks
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2010-58-22
Tuesday, 22 Jun 2010 02:58 PM
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