UPDATE 4-US OKs first deepwater drilling permit after spill

* Regulator says politics didn't influence permit decision

* US lawmakers likely to grill Interior Secy later in week

* More deepwater drilling permit approvals expected

* Noble shares up 4 pct, Ensco shares up 1.2 pct
(Adds Ensco details paragraph 3, Chevron executive's comment
paragraphs 11-12)

By Erwin Seba

HOUSTON, Feb 28 (Reuters) - U.S. regulators on Monday
granted the first deepwater drilling permit since the massive
U.S. Gulf of Mexico oil spill last April that prompted the
Obama Administration to impose a drilling moratorium.

The U.S. Bureau of Ocean Energy Management approved a
permit for Noble Energy Inc (NBL.N) to drill in the Mississippi
Canyon area of the Gulf, about 70 miles (110 km) south of the
Louisiana coast.

Shares of Noble rose nearly 4 percent to $92.66 on the New
York Stock Exchange on the news of the permit. Shares of Ensco
Plc (ESV.N), whose rig will drill the well, rose 1.2 percent.

Initial drilling had started on April 16, four days before
the Deepwater Horizon exploded, killing 11 workers and
eventually releasing more than 4 million barrels of oil from a
well owned by BP Plc (BP.L)(BP.N).

The Obama administration imposed a temporary ban on
drilling at depths greater than 500 feet shortly after the BP
disaster. The moratorium was officially lifted last October,
but until now no new deepwater permits had been approved.

Michael Bromwich, who heads the offshore drilling
regulating agency, downplayed suggestions the permit was issued
to ease Interior Secretary Ken Salazar's appearance before two
congressional hearings later this week.

Lawmakers were expected to grill Salazar, and still may,
over the department's slow decision making on deepwater
drilling permits. Drilling advocates say the United States
needs to produce more of its own oil as crude prices top $100 a
barrel amid unrest in Libya.

"There is no politics associated with the approval of this
application," Bromwich said. "This permit was issued for one
simple reason: the operator successfully demonstrated that it
can drill its deepwater well safely and that it is capable of
containing a subsea blowout if it were to occur."

Gulf Coast officials applauded the Noble permit approval,
but continued to express impatience with drilling delays.

"We've already watched seven deepwater rigs leave the Gulf
of Mexico for other countries because of the moratorium," said
Louisiana Governor Bobby Jindal. "It's time to reverse that
trend and get the Gulf back to work."

"STEP IN THE RIGHT DIRECTION"

Leading Gulf of Mexico driller Chevron called the permit
for Noble Energy a "step in the right direction."

"I hope it is the first of many, and that other permits
currently caught up in the backlog of regulatory uncertainty
will be approved quickly," said Gary Luquette, president of
Chevron's North America exploration and production arm.

Houston-based Noble plans to use a new underwater
containment system developed by Helix Energy Solutions Group
Inc (HLX.N) to help capture any oil from a potential spill.

"Noble Energy is proud to help lead the industry back to
drilling in the deepwater Gulf," David Stover, Noble Energy's
president, said in a statement.

Noble plans to resume its drilling project, which is
located in 6,500 feet of water, in late March. That is in
deeper water than the Deepwater Horizon rig was operating in
before it exploded and sank. Ultimately, Noble plans to drill
to a depth of about 19,000 feet.

Bromwich said the agency would approve other deepwater
drilling permits in the weeks and months ahead and he expected
the Noble decision to send a signal to other oil companies to
file for their drilling permits.

However, he warned the agency still needs extra funds from
Congress to hire the staff needed to approve and monitor new
drilling projects. The delay in money will slow the agency's
review process for applications, he said.

Royal Dutch Shell Plc (RDSa.L), which also had projects put
on hold due to the drilling ban, said it was pleased Interior
was allowing some activity to resume.

"While it is encouraging that the industry now has a green
light to resume previously approved drilling operations in the
deep water Gulf of Mexico, we are hopeful that this positive
momentum will also drive forward much-needed, new exploratory
drilling in a timely manner," the company said in a statement.

A federal judge earlier in the month had ordered the
Interior Department to decide on five pending applications by
London-based rig contractor Ensco. [ID:nN17641341]
(Additional reporting by Tom Doggett and Ayesha Rascoe in
Washington, and Braden Reddall in San Francisco; Editing by
David Gregorio and Sofina Mirza-Reid)