Gulf Oil Production Moving to Africa

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Discussion Overview

The discussion centers around the shifting oil drilling operations from the Gulf of Mexico to Africa, particularly the Republic of Congo, in light of perceived political and economic risks associated with drilling in the US. Participants explore the implications of this shift, including financial losses, industry practices, and government policies affecting drilling operations.

Discussion Character

  • Debate/contested
  • Exploratory
  • Technical explanation
  • Conceptual clarification

Main Points Raised

  • Some participants note that it has become less politically and economically risky to drill off the coast of Africa compared to the US, attributing this to government policies, particularly during the Obama administration.
  • Concerns are raised about the financial implications of rigs leaving the Gulf, with estimates of potential job losses and economic impact discussed.
  • Participants mention the mobility of drilling rigs and speculate on the possibility of rigs returning to the Gulf if conditions improve.
  • There is a discussion about the utilization rates of rigs in the Gulf, with some suggesting that the departure of a few rigs may not significantly impact the overall situation.
  • Some participants express skepticism about the effectiveness of government regulations on drilling and question the motivations behind the shift to Africa.
  • Clarifications are made regarding the timeline and economic calculations involved in the decision to move rigs, including the costs associated with relocating versus potential profits from drilling.
  • There are differing opinions on whether the movement of rigs is beneficial or detrimental to US interests, particularly in relation to foreign oil dependence and trade deficits.

Areas of Agreement / Disagreement

Participants express a range of views on the implications of the shift in drilling operations, with no clear consensus on whether it is a positive or negative development. Disagreements exist regarding the motivations behind the government's policies and the economic impact of rigs leaving the Gulf.

Contextual Notes

Participants reference various assumptions about the economic conditions and regulatory environment affecting drilling operations, but these assumptions remain unresolved and are subject to differing interpretations.

  • #31
mheslep said:
Given the cost of lost income during a move is $30M, why do you believe the redeployed rigs would ever come back?

New administration, new incentives to come back. 30$ mill is a drop in the pond.
 
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  • #32
KalamMekhar said:
New administration, new incentives to come back. 30$ mill is a drop in the pond.

I have to agree with this new sentence here. $30 million dollars may seem like a lot to you and me, but you have to remember that the net income of BP in one year is http://www.bp.com/liveassets/bp_internet/globalbp/STAGING/global_assets/downloads/B/bp_fourth_quarter_and_full_year_2009_results.pdf". What does $30 million matter to them?
 
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  • #33
Char. Limit said:
I have to agree with this new sentence here. $30 million dollars may seem like a lot to you and me, but you have to remember that the net income of BP in one year is http://www.bp.com/liveassets/bp_internet/globalbp/STAGING/global_assets/downloads/B/bp_fourth_quarter_and_full_year_2009_results.pdf". What does $30 million matter to them?

Hmm. I suspect there are managers at BP below the CEO who are responsible for only a portion of BP. I imagine that the least-powerful manager who is still in charge of a given rig will find $30 million dollars to be very significant.
 
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  • #34
CRGreathouse said:
Hmm. I suspect there are managers at BP below the CEO who are responsible for only a portion of BP. I imagine that the least-powerful manager who is still in charge of a given rig will find $30 million dollars to be very significant.

I confess to being ignorant of BP's organizational chart, but I would be very surprised if there was someone that was in charge of only one or two rigs who also had the power to choose where in the world they set up shop. These decisions probably come from higher up the food chain
 
  • #35
Tone of the article seems a bit sensationalist if you ask me, and misleading.

As far as I could tell two rigs have headed to Africa in the midst of this ban and five more might follow (out of 33 from one company). Not a huge deal, really. They probably need more rigs in Africa right now anyway, as new deep water plays have been opening up following a recent surge in exploration. I wonder how many rigs have made this journey before the disaster? We can't necessarily assume that they have gone there because of the ban -- they might've made the journey anyway in pursuit of a good business opportunity. Afterall, those rigs were idle before the disaster, or merely drilling exploratory holes, and so better use might be made of them offshore Africa. As far as I understand, the ban is only on any new activity; rigs that are currently producing are still allowed to produce. It's not as though that all activity in the Gulf has completely ground to a halt (as some people seem to be assuming).
 

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