Government and business leaders blasted the Obama administration's continuing de facto moratorium on oil and gas drilling in the Gulf of Mexico (GOM) after Seahawk Drilling Inc., a major GOM shallow water driller, filed for bankruptcy on Friday.
Seahawk said competitor Hercules Offshore Inc. would acquire all of Seahawk's assets in a transaction through Chapter 11 valued at about $105 million. Both companies are based in Houston.
"I think it is important to note that Seahawk was forced to seek strategic alternatives only after an unprecedented decline in the issuance of offshore drilling permits following the Macondo blowout," Seahawk CEO Randy Stilley said Friday. "The decision by regulators to arbitrarily construct unnecessary barriers to obtaining permits they had traditionally authorized has had an adverse impact not only on Seahawk, but on the sector as a whole."
The company also said it was adversely affected by low natural gas prices and the poor state of the economy. Seahawk owns 20 rigs in the GOM, making it the second-largest shallow water driller there.
In a sharply worded statement, U.S. Sen. Mary Landrieu (D-La.) also blamed the slow pace of issuing shallow water drilling permits since the Macondo blowout last April for Seahawk's demise.
"I have said repeatedly that the administration's excruciatingly slow release of oil and gas permits will cause job losses and undue economic hardship," Landrieu said Friday. "Sadly, the worst-case predictions are now true, and we are still living this economic nightmare."
The news surrounding Seahawk came just days after two deepwater offshore drillers, Ensco plc and Pride International Inc., announced plans to merge in a deal valued at $7.3 billion. Industry experts say mergers like Ensco-Pride are part of an consolidation that is taking place since Macondo (see Daily GPI, Feb. 8).
According to Landrieu's office, 31 shallow water permits and one exploratory permit have been issued since the BP Macondo well blowout, but none have been approved for deepwater drilling. The office also said a federal judge ruled that the U.S. Interior Department was in civil contempt for failing to comply with his order from June 2010 against the moratorium on deepwater oil and gas drilling, saying faulty reasoning was used to implement the ban.
"The most infuriating thing about [Seahawk's bankruptcy] announcement is that the shallow water industry was not placed under the president's moratorium," Landrieu said. "Despite this, [the government's] new rules and regulations make it very difficult to conduct business in the Gulf.
"It is time the administration ends this madness and get the folks along the Gulf Coast back to work."
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