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Oil exploration and production (E&P) companies are drilling further out into the sea and deeper under the ocean floor, at depths greater than 1000 feet to tap into one of the last remaining pockets of oil and natural gas in the world.^[1] Though deepwater was once prohibitively expensive, high oil prices during 2007 and the first half of 2008 made the economics of deepwater drilling feasible. Oil's collapse during the 2008 Financial Crisis has killed the margins of many in the industry, but demand for deepwater rigs is still high.^[2] Tied into long term contracts, companies continue to drill despite falling profits.^[3] Even then, new deepwater projects continue to be opened, as prices are expected to rebound in the long term because of rising global demand for energy. According to industry analysts, day rates will likely fall in the future as the shortfall in rigs is met by growing supply, and as the price of oil continues to remain low.^[4] That's good for E&P companies, as they need oil. As traditional oil producing basins mature there are only a couple of places left to get oil. Renewable energy is projected to start taking away some of oil's monopoly, but that may not be for decades to come.^[5] Proven reserves of oil at the end of 2006 were at 1.15 trillion barrels,^[6] of which about 10% is deepwater - a little more than 100 billion barrels.^[7]

^[8]

Companies that Win from Deepwater Exploration

• Nalco Company (NLC) provides high technology chemicals and services for increasing production, improving quality of oil extracted and maintaining equipment used by the oil companies.

• Schlumberger N.V. (SLB) provides oil & gas drilling & exploration companies technologically advanced equipment and management services that aid in the extraction and production of crude oil and natural gas. The company provides a range of products from exploration to production of oil. ^[9] The company acquired Santa Fe International (GSF) in late November 2007, creating the second largest oilfield services company overall, behind only Schlumberger N.V. (SLB) (based on market capitalization).^[10] Given that GSF also specializes in offshore drilling, the company in effect doubled down on deepwater drilling.

• Oceaneering International (OII) derives about 90% of its revenue from the oil and natural gas sector.^[11] The company provides engineering services and products such as remotely operated vehicles (or ROVs such as submarines), tubes, umbilicals that connect the equipment underwater to the rig, valves and similar products. Most of its products focus on deepwater applications. Fiscal year 2008 revenues amounted to $1.97 billion.^[12]

• Brazilian Petroleum Corporation (PBR) is the national oil company of Brazil, with a virtual monopoly of all petroleum exploration and production in the country. In November 2007, the company announced the discovery of the Tupi oilfield, the biggest discovery in the last 20 years worldwide.^[13] Estimates from geological studies claim reserves in the range of 5 to 8 billion BOE.^[13] To put this in perspective, this field alone increases Brazil's hydrocarbon reserves by nearly 50%.^[13] One complication is that the oil is beneath 2000 to 3000 meters of water, making its retrieval a complex and likely expensive deepwater project. ^[14] As of May, 2008, Petrobras had contracted 80% of the world's deepwater rigs, driving dayrates up for the rest of the industry as remaining oil majors like Exxon Mobil and BP compete for the other 20%.^[15]

• Trico Marine Services (TRMA) is a small company (~$500 million market capitalization as of November 2007). The company rents boats to transport equipment to offshore rigs, charging $20-25,000 per day for its vessels. The company will benefit from the growth of deepwater rigs, which are further out (i.e., higher overall rates). The company has a strong competitive moat in that not many vessels in the world are equipped to erect and maintain offshore drilling facilities.

• ChevronTexaco (CVX) acquired Unocal to get exposure to its Gulf of Mexico holdings. The company also partnered with MIT to develop ultra-deepwater drilling technology, to let the company search for oil at depths never before considered.

• Diamond Offshore Drilling (DO) owns one of the largest drilling fleets in the world, a total of 44 ships, including 30 semisubmersibles, 14 jack-ups and one drillship. DO contracts these rigs to “operators”, or oil companies to find new oil or gas deposits, or to prepare existing deposits for production.^[16][17]

• HESS is an oil and gas company, that specializes in deepwater drilling. It derives almost 2/3 of its production from the US.

• Cameron Corporation (CAM) and FMC Technologies (FTI) are the two largest installers of subsea "trees", which are used to pump oil and gas out of underwater wells. As demand for deepwater drilling increases, demand for deepwater trees will increase as well. In the subsea tree industry, FMC has a market share of 40%, while CAM has a market share of 20%.^[18]

• National-Oilwell Varco (NOV) is the world's largest supplier of deepwater rigs and equipment - 90% of all rigs have some part made by the company.^[19] Other part suppliers include Baker Hughes (BHI), Smith International (SII) and FMC Technologies (FTI).

• SeaDrill Limited (SDRL) is a Bermuda-based offshore drilling company, with units deployed in northern Europe, Africa, southeast Asia, and North America. The company also has platform drilling and well intervention on fixed installations in the North Sea. ^[20]

Companies that Lose from Deepwater Exploration

• Rowan Companies is an offshore drilling contractor that operates only in shallow waters. As such, the company does not have the deepwater capabilities, meaning it cannot compete effectively in regions (like the Gulf of Mexico) where shallow production is slowing and deepwater production is increasing, causing its dayrates to lag behind the rest of the industry.

• Hercules Offshore (HERO) is an offshore drilling contractor operating in shallow waters only.

Renewable Energy companies suffer, as deepwater drilling increases oil production, which lowers the price of oil. That makes solar power, wind energy, and nuclear power less competitive and more reliant on government subsidies for success.

• Large uranium production companies include: Cameco (CCJ) (19% of world production), Rio Tinto (RTP) (17%), Areva (ARVCF.PK) (15%), KazAtomProm (12% - Khazakstani), ARMZ (8%), BHP Billiton (BHP) (8%), and NAVOI Mining Metallurgical Kombinat (6% - Uzbekistani).^[21] Other players include Cogema, Energy Resources of Australia (ERA-ASX), Uranium One (UUU-TSX) , General Electric Company (GE), and Priargunsky Industrial Mining and Chemical Enterprise (Russian).

• Uranium exploration companies like Hathor Exploration (V-HAT-TSX) and Uracan Resources (V-URC-TSX) suffer, as their finds become less valuable.

• Manufacturers of polysilicon and silicon wafers, key components of solar cells, include MEMC Electronic Materials, HOKU Scientific, and LDK Solar.

• Manufacturers of solar cells include First Solar, SunPower, Suntech Power Holdings, Sharp, and BP.

• Manufacturers of wind turbines include Vestas, GE, Enercon, Gamesa, and Suzlon Energy Limited.

• Operators of wind farms include the FPL Group (FPL) and Xcel Energy (XEL).

The Largest Deepwater Reserves

The Gulf of Mexico (GOM) is the biggest opportunity for drilling near the continental United States, with an estimated 30-40 billion barrels of oil and gas deepwater reserves.^[22] Deepwater drilling started accounting for the majority of GOM production starting around 2000-2001.^[23] Based on geological surveys to date, deepwater will account for nearly three-fourths of all production in this region in 2007-2008.^[23]

Total oil production in the gulf of mexico^[23]

Brazil's estimated deepwater reserves have expanded from less than 15 billion barrels in 2004 to more than 30 billion in 2009 due to a slew of recent discoveries.^[24] A lot of that is under the control of semi-public Petrobras, which has been very busy developing new deepwater technology, building shipyards capable of manufacturing deepwater rigs, and has been busy contracting most of the worlds supply of deepwater rigs - 80% in May of 2008.^[25] Due massive oil discoveries from 2007 to 2009, Brazil has the potential of being a net exporter of oil.^[26] In particular, the Tupi field reserves, discovered in 2007, and the Guara oil field reserves, discovered in 2009, are estimated to hold a combined total between 6 billion and 10 billion barrels of oil.^[27] Between 2007 and 2009, Brazil has also made several subsalt oil discoveries. While these finds have the potential of making Brazil one of the largest producers of oil, extraction from subsalt locations is expensive and has posed technical difficulties in 2009.^[28] In September 2009, President Luiz Inacio Lula da Silva proposed changes to Brazil's oil regulation that would make Petrobras the sole operator of these new reserves.^[29]

Africa has over 30 billion barrels of deepwater reserves.^[30]

Trends and Forces

BP's big oil discovery shows the potential of offshore Gulf of Mexico oil fields

In September 2009, BP reported "giant" oil findings at its Tiber prospect, about 200 miles south of Louisiana.^[31] The discovery is one of a dozen deepwater discoveries that has revived interest in oil exploration off the coast of the southern United States. New technology has played the largest role in the Gulf discoveries by enabling exploration in the deepest recesses of the region.^[32] However, many of these oil reserves are located in the Gulf's lower tertiary more than 2 miles below sea level and require expensive equipment to drill. Despite the expensive equipment required, most of the western oil majors have begun increasing their Gulf exploration activities to take advantage of the regions proximity to the U.S. as well as the low U.S. offshore tax regulations.^[33] Although Chevron, Royal Dutch Shell, and BP have made the largest discoveries in terms of potential reserves, oil from the lower tertiary has the potential of being hard to extract even with new technologies.^[34]

U.S. Government has ability to both fund and restrict offshore drilling

The U.S. is going to lend billion of dollars to Petrobras to finance the development of its Tupi fields.^[35] The U.S. Export-Import bank issued a preliminary commitment of $2 billion in August 2009 and has the capability of increasing that amount. Through its foreign aid to Brazil, the U.S. Government has signaled that it views offshore drilling in the Americas as a viable alternative source of oil to OPEC imports. Just before the November 2008 elections, Congress let the ban on offshore drilling expire at a time when gasoline prices were $4 per gallon.^[36] Areas off the coast of Alaska, California, and in the Gulf of Mexico have the potential of containing as much oil as the Tupi Field in Brazil.^[37] Although drilling Alaska is still prohibited by the federal government, the U.S. government has the likely to begin leasing areas in the Gulf of Mexico in August and September 2009.^[38]

Many oil majors are lobbying U.S. congress in an effort to open more offshore regions to drilling and exploration.^[39] As of November 2009, The U.S. Interior Department is considering a five-year plan that has the potential of opening new offshore areas to drilling. The oil majors have argued that offshore reserves are capable of being substantial and reducing the U.S.'s dependence on crude imports.^[40] While many environmental groups oppose offshore drilling, new drilling technology has been developed that has the potential of reducing environmental damage. However, if allowed, offshore drilling has the potential of facing restrictive regulations, including the use of environmentally-friendlier equipment. These factors are capable of increasing the cost of drilling offshore.^[41]

To combat costs, exploration and production companies begin to restructure operations

Through a method called subsea tiebacks, companies like BP (BP), Marathon Oil (MRO), and Royal Dutch Shell (RDS'A) have began reusing old deepwater infrastructure to pump oil from smaller sized fields.^[42] Companies are looking for smaller satellite oil and gas deposits to feed into already built platforms that were originally designed for larger oil fields.^[43] According to the Wall Street Journal, companies have been able to use technological advanced equipment to pump oil from satellite fields located farther and farther away.^[44] By using subsea tiebacks, exploration and production companies do not have to build additional rigs, which are expensive to construct and maintain.^[45] Since the beginning of 2008, Six new deepwater tiebacks have begun pumping. An additional 23 tiebacks are in development and expected to be operational before the end of 2011.^[46]

In June 2009, Pride International (PDE) announced its plans to spin-off its mat-supported jackup fleet in the Gulf over the next few months in the form of a stock dividend.^[47] As a result, Pride International (PDE) has the potential of being one of the most concentrated deepwater drillers in terms of number of rigs.^[48] Pride's management made the decision because they believe that the jackup industry has the potential of being very volatile in the future. With 90% of in backlog related to deepwater, Pride International (PDE) is capable of concentrating more of its financial resources more on deepwater drilling if its sells its jackup operations.^[49]

Offshore Oil Plans to Benefit from Obama’s Energy Independence Plan

Energy, in particular renewable energy, accounts for at least $17 billion of President Obama’s $787 billion Economic Recovery package.^[50] Although it is not clear how much of that package will go to offshore oil drilling, executives at BP (BP), Royal Dutch Shell (RDS'A), and Devon Energy (DVN) are lobbying for Government Investments in offshore oil drilling.^[51] The executives are emphasizing the potential oil reserves in the eastern Gulf of Mexico and offshore Alaska, which have been mostly off-limits due to a now lapsed 27-year moratorium.^[52] In particular, the Gulf of Mexico reserves are eight times greater than the initial estimates made before production began.^[53] Improved deepwater technology can reduce the environmental impact of offshore drilling while increasing the amount of oil companies can extract from deep sea drilling.^[54]

Growing Worldwide Demand for Energy is Straining Conventional Oil Resources

Oil price forecast until 2030, by the EIA in December of 2008^[55]

Demand for oil, as well as demand for energy in general, is closely tied to the global economic cycle. In periods of economic growth, new factories consume energy, shipping companies transport more goods and consumers take more trips. This demand for energy—or even news suggesting the economy is heating up—pushes up energy prices. For example, the five major central banks announced in December 2007 that they would pump money into the world economy to help mitigate the possibility of a recession; immediately, the price of oil jumped over $4 at speculation that energy demand would increase.^[56] Conversely, during periods of economic contraction such as recessions, demand for oil and other types of energy tends to fall, leading to reductions in price. In China, for example, manufacturing fell during July and August 2008, and oil prices followed.^[57]

The price of oil determines the profitability of deepwater drilling. If the cost to set up and run a deepwater rig is higher than the price of oil, deepwater drilling becomes unprofitable. Oil's long term price trend is important, because there is about a 10 year lag time between making a discovery and starting production.^[58] Expecting significant economic growth over the next 10 years, as well as its counterpart, a rise in oil prices, E&P companies continue to develop deepwater fields.

However, lower capital expenditures budgets as well as tighter credit has the potential of significantly reducing investments in international deepwater fields. In particular, investments in Nigeria’s deepwater fields declined in 2009 as a result of budget cuts by international oil majors.^[59] Nigeria's deepwater exploration and production projects have been financed solely by international oil companies, reaching over $21 billion in the last nineteen years. Government reforms in the Nigerian oil and gas industry have tightened the terms on operations and have driven off potential investments in the area.^[60] Like Nigeria, the loss of international oil investments has the potential of reducing exploration and halting production in regions that depend heavily on foreign capital.^[61]

The Available Supply of Deepwater Rigs is Low

Petrobras' success in deepwater oil exploration has lead the company to invest zealously: as of May 2008, the company had contracted 80% of the world's deepwater rigs, driving up dayrates for the sector as other companies like Exxon Mobil and BP competed for the remainder.^[25] Even after the collapse in the price of oil, fleet utilization has remained at 100%.^[2] The reason is fivefold:

Projected deepwater rig shortfall^[62]

• Most E&P companies are stuck in deepwater drilling contracts with time periods of six months to six years.^[3] Add together the contract costs of not drilling with lost oil revenues, and E&P companies have an incentive to continue drilling, even if they do so at a loss.
• The cost of new production hovers in the range of $90 a barrel,^[63] but it takes deepwater operations about 10 years to start producing. After 10 years, the Energy Information Agency forecasts that prices will be above $120 a barrel.^[55]
• There is a lack of shipyard production capacity.^[64] Before 2008 few thought that oil would break $100 a barrel. Even half a year into oil's decline since the peak in July of 08, long term forecasts remain higher than before.^[55] Not anticipating that oil prices would be so high, and that there would be a surge in demand for deepwater rigs, shipyards have been slow to build additional production capacity.
• The large oil & gas companies have investment grade ratings, and even then still have deep pockets.^[65] The cost of capital has risen for all companies, but many E&P companies have the resources to continue bidding up dayrates.
• Traditional oil producing basins have matured, particularly on land, and exploration & production companies have been forced to look for new reserves in ever more challenging environments like the deepwater environments off the Coast of Africa and in the deepwater Gulf of Mexico (beyond the Continental Shelf) in order to maintain production and profits.

For these four reasons, a deepwater rig shortage has been forecast through 2009 until 2011.^[62]

Falling Oil Prices Are Shrinking Deepwater Margins

Because there is a shortage of deepwater rigs, the daily price paid by E&P companies to use deepwater rigs has increased about 20% in the six months since oil prices peaked in 2008.^[2] At the same time, the price of oil has come down over 65%. That means that many deepwater operations are starting to test the edge of profitability, while others have already become unprofitable but only continue operations because of contractual obligations. As contracts start to expire and the shortfall in rig supply abates, according to industry analysts dayrates will fall and make margins more attractive.^[4] Of course, dayrates will never fall below cost, which varies widely depending on the depth and type of reserve being extracted. Many ultra-deep operations cost more than $60-$70 a barrel, and so will likely be suspended.^[3] Other deepwater operations cost $40-$50 a barrel, and so offer the opportunity to turn a profit.^[66]

Shrinking Credit Markets Have Slowed Deepwater Activity & Made Borrowing More Expensive

Before the oil price collapse in the middle of 2008, floating offshore rigs could go as high as $292,000^[67], but deepwater oil exploration rigs were contracting at above $800,000 per day.^[68] Even into the first quarter of 2009, rates have not fallen as supply remains low.^[2] For the E&P companies with investment grade ratings, the average cost of borrowing has risen from a measly 2% in early 2008, to more than 6% in late 2008.^[65] As deepwater drilling is more expensive and delivers smaller returns than traditional sources of oil, investment grade companies have started to review their deepwater spending, while the companies with less cash and more debt have been forced, from a lack of similarly cheap credit, to actually cut their expenditures.^[65] Nevertheless, as of February of 2009, demand for deepwater drills has remained high enough to maintain rig utilization at 100%.^[2]

Alternative Energy Sources are Slowly Becoming More Attractive

Everything from renewable sources such as solar and wind to newer technologies such as cleaner-burning coal and hybrid and fuel cells are expected to steal some of oil's share of the worldwide energy market in the future.^[5] The only question is by how much. As concern over global warming and energy independence fuels investment into alternative energies, and as that investment makes alternative energy cheaper and more efficient, deepwater will be hurt. At the same time, deepwater E&P is a growing field where economies of scale and increasing technological innovation have the potential to bring down the cost of finding reserves, and of manufacturing and operating rigs.

One of the largest disruptors in the renewable energy industry is the government. Legislative support for clean energy investment in the form of tax breaks, subsidies, and energy mandates has driven growth in the sector over the past few years. Because most renewables aren't as cost-efficient as traditional fossil fuels, such government support is necessary to make clean energy appealing.

In January 2009, President-elect Barack Obama called for the U.S. to double its use of renewable energy by 2012, as part of his plan to stimulate the economy and pull the country out of recession. His plan, which is expected to include up to $800 billion over two years in subsidies and tax cuts for renewable energy, energy efficiency, and electric grid modernization projects, has the potential to pull the industry out of the slump caused by the 2008 Financial Crisis.^[69]

References

1. ↑ U.S. Department of the Interior, Minerals Management Sercice, Gulf of Mexico OCS Region, 2004
2. ↑ ^{2.0 2.1 2.2 2.3 2.4} Energy Current - Offshore rig day rate patterns continue
3. ↑ ^{3.0 3.1 3.2} Seeking Alpha - Deepwater Drillers: Not in a Very Deep Hole
4. ↑ ^{4.0 4.1} RigZone - Offshore Drillers Find It Harder to Float Above Sinking Demand
5. ↑ ^{5.0 5.1} Energy Information Administration - New EIA Energy Outlook Projects Flat Oil Consumption to 2030, Slower Growth in Energy Use and Carbon Dioxide Emissions, and Reduced Import Dependence
6. ↑ Energy Information Administration - World Proved Reserves of Oil and Natural Gas, Most Recent Estimates
7. ↑ Pareto Fonds/Simmons & Company International - The Deepwater Opportunity
8. ↑ U.S. Department of the Interior, Minerals Management Sercice, Gulf of Mexico OCS Region, 2004, p. 3
9. ↑ Google Finance<ref>
   • [[2H Offshore]] specialises in the design, supply, and monitoring of deepwater risers as part of the parent group Acteon. 2H act as engineering consultants to the major oil and gas companies, with offices worldwide.
   • [[Transocean (RIG)]], as the name implies, is the biggest U.S. provider of rigs, platforms and services for offshore drilling.<ref>[http://sec.gov/Archives/edgar/data/1083269/000114036108005230/form10-k.htm RIG 2007 10-K]</li>
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Finance - Competitors]</li> <li id="_note-6">[[#_ref-6|↑]] [http://www.sec.gov/Archives/edgar/data/73756/000095012909000581/h65906e10vk.htm OLL 2008, 10K, Item 6, Page 26]</li> <li id="_note-7">[[#_ref-7|↑]] [http://www.sec.gov/Archives/edgar/data/73756/000095012909000581/h65906e10vk.htm OLL 2008, 10K, Item 6, Page 19]</li> <li id="_note-tupi">↑ ^{[[#_ref-tupi_0|13.0]]} ^{[[#_ref-tupi_1|13.1]]} ^{[[#_ref-tupi_2|13.2]]} [http://oilgascoal.com/index.php?option=com_content&task=view&id=576&Itemid=46 OilGasCoal - Petrobras' Tupi Oil Field May Hold 8 Billion Barrels]</li> <li id="_note-8">[[#_ref-8|↑]] [http://www.theoildrum.com/node/3269 The Oil Drum: Tupi, The New Kid in Town, November 22, 2007] </li> <li id="_note-9">[[#_ref-9|↑]] [http://www.bloomberg.com/apps/news?pid=20601087&sid=a8V5CHwdycrk&refer=home Bloomberg.com: "Petrobras Hires 80% of Deepwater Rigs, Inflates Rents (Update1)"]</li> <li id="_note-10">[[#_ref-10|↑]] (DO) Form 10-K, Fiscal year 2006, "The Fleet", p.3, pp.15-17</li> <li id="_note-11">[[#_ref-11|↑]] http://www.diamondoffshore.com/ourCompany/ourcompany_offshorerigbasics.php</li> <li id="_note-12">[[#_ref-12|↑]] [http://seekingalpha.com/article/113436-fmc-technologies-positioned-for-a-deepwater-drilling-boom?source=email SeekingAlpha: "FMC Technologies: Positioned for a Deepwater Drilling Boom"]</li> <li id="_note-13">[[#_ref-13|↑]] Morningstar Analysis, National-Oilwell Varco, January 10th, 2008</li> <li id="_note-14">[[#_ref-14|↑]] [http://www.google.com/finance?q=sea+drill Google Finance]</li> <li id="_note-percent">[[#_ref-percent_0|↑]] [http://www.world-nuclear.org/info/inf23.html World Nuclear Association - World Uranium Mining]</li> <li id="_note-15">[[#_ref-15|↑]] [http://leanenergy.ldeo.columbia.edu/docs/UltraDeep%20Prosp%2010-22-02.pdf Columbia University - Prospectivity of the Ultra-Deepwater Gulf of Mexico]</li> <li id="_note-mms">↑ ^{[[#_ref-mms_0|23.0]]} ^{[[#_ref-mms_1|23.1]]} ^{[[#_ref-mms_2|23.2]]} [http://www.mms.gov/assets/PressConference11152004/2004-065.pdf U.S. Department of the Interior, Minerals Management Sercice, Gulf of Mexico OCS Region, 2004, p. 12]</li> <li id="_note-16">[[#_ref-16|↑]] [http://www.csmonitor.com/2008/1114/p01s04-woam.html The Christian Science Moniter - Brazil as a new kind of oil giant]</li> <li id="_note-petrobas">↑ ^{[[#_ref-petrobas_0|25.0]]} ^{[[#_ref-petrobas_1|25.1]]} [http://www.bloomberg.com/apps/news?pid=20601087&sid=a8V5CHwdycrk&refer=home Bloomberg.com: "Petrobras Hires 80% of Deepwater Rigs, Inflates Rents (Update1)"]</li> <li id="_note-17">[[#_ref-17|↑]] [http://www.reuters.com/article/rbssEnergyNews/idUSN0830195820090909 Retuers: Test confirms subsalt productivity-Petrobras, September 2009]</li> <li id="_note-18">[[#_ref-18|↑]] [http://www.reuters.com/article/rbssEnergyNews/idUSN0830195820090909 Retuers: Test confirms subsalt productivity-Petrobras, September 2009]</li> <li id="_note-19">[[#_ref-19|↑]] [http://www.reuters.com/article/rbssEnergyNews/idUSN0830195820090909 Retuers: Test confirms subsalt productivity-Petrobras, September 2009]</li> <li id="_note-20">[[#_ref-20|↑]] [http://www.reuters.com/article/rbssEnergyNews/idUSN0830195820090909 Retuers: Test confirms subsalt productivity-Petrobras, September 2009]</li> <li id="_note-21">[[#_ref-21|↑]] [http://www.technip.com/stream_2004/pdf/03_InvestorDay.pdf Technip - Brazil as a new kind of oil giant]</li> <li id="_note-22">[[#_ref-22|↑]] [http://online.wsj.com/article/SB125189057895179241.html WSJ: BP's Big Oil Find Cements Gulf's Revival, September 2009]</li> <li id="_note-23">[[#_ref-23|↑]] [http://online.wsj.com/article/SB125189057895179241.html WSJ: BP's Big Oil Find Cements Gulf's Revival, September 2009]</li> <li id="_note-24">[[#_ref-24|↑]] [http://online.wsj.com/article/SB125189057895179241.html WSJ: BP's Big Oil Find Cements Gulf's Revival, September 2009]</li> <li id="_note-25">[[#_ref-25|↑]] [http://online.wsj.com/article/SB125189057895179241.html WSJ: BP's Big Oil Find Cements Gulf's Revival, September 2009]</li> <li id="_note-26">[[#_ref-26|↑]] [http://online.wsj.com/article/SB10001424052970203863204574346610120524166.html WSJ: Obama Underwrites Offshore Drilling, August 2009]</li> <li id="_note-27">[[#_ref-27|↑]] [http://online.wsj.com/article/SB10001424052970203863204574346610120524166.html WSJ: Obama Underwrites Offshore Drilling, August 2009]</li> <li id="_note-28">[[#_ref-28|↑]] [http://online.wsj.com/article/SB10001424052970203863204574346610120524166.html WSJ: Obama Underwrites Offshore Drilling, August 2009]</li> <li id="_note-29">[[#_ref-29|↑]] [http://online.wsj.com/article/SB10001424052970203863204574346610120524166.html WSJ: Obama Underwrites Offshore Drilling, August 2009]</li> <li id="_note-30">[[#_ref-30|↑]] [http://www.reuters.com/article/environmentNews/idUSTRE5AI3WG20091119 Reuters: Big Oil to Congress: Expand offshore drilling, November 2009]</li> <li id="_note-31">[[#_ref-31|↑]] [http://www.reuters.com/article/environmentNews/idUSTRE5AI3WG20091119 Reuters: Big Oil to Congress: Expand offshore drilling, November 2009]</li> <li id="_note-32">[[#_ref-32|↑]] [http://www.reuters.com/article/environmentNews/idUSTRE5AI3WG20091119 Reuters: Big Oil to Congress: Expand offshore drilling, November 2009]</li> <li id="_note-33">[[#_ref-33|↑]] [http://online.wsj.com/article/SB124155530486688737.html BP Drilling Platform Reaches Far Afield, May 2009]</li> <li id="_note-34">[[#_ref-34|↑]] [http://online.wsj.com/article/SB124155530486688737.html BP Drilling Platform Reaches Far Afield, May 2009]</li> <li id="_note-35">[[#_ref-35|↑]] [http://online.wsj.com/article/SB124155530486688737.html BP Drilling Platform Reaches Far Afield, May 2009]</li> <li id="_note-36">[[#_ref-36|↑]] [http://online.wsj.com/article/SB124155530486688737.html BP Drilling Platform Reaches Far Afield, May 2009]</li> <li id="_note-37">[[#_ref-37|↑]] [http://online.wsj.com/article/SB124155530486688737.html BP Drilling Platform Reaches Far Afield, May 2009]</li> <li id="_note-38">[[#_ref-38|↑]] [http://seekingalpha.com/article/144289-deepwater-drilling-pride-becomes-a-pureplay?source=email Seekingalpha.com: Deepwater Drilling: Pride Becomes a Pureplay, June 2009]</li> <li id="_note-39">[[#_ref-39|↑]] [http://seekingalpha.com/article/144289-deepwater-drilling-pride-becomes-a-pureplay?source=email Seekingalpha.com: Deepwater Drilling: Pride Becomes a Pureplay, June 2009]</li> <li id="_note-40">[[#_ref-40|↑]] [http://seekingalpha.com/article/144289-deepwater-drilling-pride-becomes-a-pureplay?source=email Seekingalpha.com: Deepwater Drilling: Pride Becomes a Pureplay, June 2009]</li> <li id="_note-41">[[#_ref-41|↑]] [http://greeninc.blogs.nytimes.com/2009/02/17/obama-signs-stimulus-packed-with-clean-energy-provisions/ Greeninc Blogs NYT: Obama Signs Stimulus Packed With Clean Energy Provisions, February 2009]</li> <li id="_note-42">[[#_ref-42|↑]] [http://blogs.wsj.com/environmentalcapital/2009/02/25/hill-drill-big-oil-execs-make-case-for-more-offshore-oil/ WSJ: Hill Drill: Big Oil Execs Make Case for More Offshore Oil, February 2009]</li> <li id="_note-43">[[#_ref-43|↑]] [http://blogs.wsj.com/environmentalcapital/2009/02/25/hill-drill-big-oil-execs-make-case-for-more-offshore-oil/ WSJ: Hill Drill: Big Oil Execs Make Case for More Offshore Oil, February 2009]</li> <li id="_note-44">[[#_ref-44|↑]] [http://blogs.wsj.com/environmentalcapital/2009/02/25/hill-drill-big-oil-execs-make-case-for-more-offshore-oil/ WSJ: Hill Drill: Big Oil Execs Make Case for More Offshore Oil, February 2009]</li> <li id="_note-45">[[#_ref-45|↑]] [http://blogs.wsj.com/environmentalcapital/2009/02/25/hill-drill-big-oil-execs-make-case-for-more-offshore-oil/ WSJ: Hill Drill: Big Oil Execs Make Case for More Offshore Oil, February 2009]</li> <li id="_note-30yrforecast">↑ ^{[[#_ref-30yrforecast_0|55.0]]} ^{[[#_ref-30yrforecast_1|55.1]]} ^{[[#_ref-30yrforecast_2|55.2]]} [http://www.eia.doe.gov/oiaf/aeo/ Energy Information Administration - Annual Energy Outlook 2009 Early Release]</li> <li id="_note-46">[[#_ref-46|↑]] [http://in.reuters.com/article/businessNews/idINIndia-30954620071212 Reuters: "Oil jumps $4 on central bank move, U.S. stock draw"]</li> <li id="_note-47">[[#_ref-47|↑]] [http://seekingalpha.com/article/93619-thank-china-and-gustav-for-lower-oil?source=feed Seeking Alpha: "Thank China and Gustav for Lower Oil"]</li> <li id="_note-cost">[[#_ref-cost_0|↑]] [http://www.mima.gov.my/mima/htmls/papers/pdf/nazery/Nazery%20-%20The%20quest%20for%20new%20energy%20sources%20-%20challenges%20of%20deepwater%20exploration.pdf Marine Institute of Malaysia - THE QUEST FOR NEW ENERGY SOURCES : CHALLENGES OF DEEPWATER EXPLORATION]</li> <li id="_note-48">[[#_ref-48|↑]] [http://www.businessdayonline.com/index.php?option=com_content&view=article&id=6493:investments-in-nigeria-deepwater-have-dipped-says-chevron-md-&catid=85:national&Itemid=340 Businessday.com: Investments in Nigeria deepwater have dipped, says Chevron MD, December 2009]</li> <li id="_note-49">[[#_ref-49|↑]] [http://www.businessdayonline.com/index.php?option=com_content&view=article&id=6493:investments-in-nigeria-deepwater-have-dipped-says-chevron-md-&catid=85:national&Itemid=340 Businessday.com: Investments in Nigeria deepwater have dipped, says Chevron MD, December 2009]</li> <li id="_note-50">[[#_ref-50|↑]] [http://www.businessdayonline.com/index.php?option=com_content&view=article&id=6493:investments-in-nigeria-deepwater-have-dipped-says-chevron-md-&catid=85:national&Itemid=340 Businessday.com: Investments in Nigeria deepwater have dipped, says Chevron MD, December 2009]</li> <li id="_note-supply">↑ ^{[[#_ref-supply_0|62.0]]} ^{[[#_ref-supply_1|62.1]]} [http://www.oliverwyman.com/ow/pdf_files/WO_Deepwater_drilling_rig_shortages_Isherwood.pdf World Oil - Deepwater drilling rig shortages: Will they continue?]</li> <li id="_note-51">[[#_ref-51|↑]] [http://www.futurepundit.com/archives/005483.html FuturePundit - Marginal Oil Production Costs Rising]</li> <li id="_note-creditimpact">[[#_ref-creditimpact_0|↑]] [http://drillingcontractor.org/forum/viewtopic.php?f=2&t=8 Drilling Contractor - Tight credit market could have ripple effect]</li> <li id="_note-COC">↑ ^{[[#_ref-COC_0|65.0]]} ^{[[#_ref-COC_1|65.1]]} ^{[[#_ref-COC_2|65.2]]} [http://blogs.oilandgasinvestor.com/steve/2008/10/06/cash-is-king-tph-team-analyzes-credit-crunch-in-ep-land/ Oil & Gas Investor - Cash Is King: TPH Team Analyzes Credit Crunch In E&P Land]</li> <li id="_note-52">[[#_ref-52|↑]] [http://www.sciencedirect.com/science?_ob=ArticleURL&_udi=B6V2W-4P0N91T-1&_user=142623&_rdoc=1&_fmt=&_orig=search&_sort=d&view=c&_acct=C000000333&_version=1&_urlVersion=0&_userid=142623&md5=ef7a1e8ea5d92041d5fd34a5f0e70e28 Science Direct - A note on US royalty relief, rent sharing and offshore oil production]</li> <li id="_note-53">[[#_ref-53|↑]] [http://www.rigzone.com/data/dayrates/ RigZone: Offshore Rig Day Rates Page, Accessed May 05, 2008]</li> <li id="_note-54">[[#_ref-54|↑]] [http://www.energycurrent.com/index.php?id=2&storyid=6707 Energy Current: "Deepwater rig day rates hit new high", November 9th, 2007]</li> <li id="_note-55">[[#_ref-55|↑]] [http://seekingalpha.com/article/114047-obama-calls-for-doubling-renewable-energy-in-three-years?source=email SeekingAlpha: "Obama Calls for Doubling Renewable Energy in Three Years"]</li></ol></ref>