* Work started on half the dozen permitted deepwater wells
* Follows Noble Energy find, US majors' plans to add rigs
* First flurry of permits may not foretell future-analyst
* Baker Hughes shares up 2.4 pct, rivals up 1-2 pct
(Adds analyst comment, rivals' share prices, byline)
By Braden Reddall
SAN FRANCISCO, June 3 Oilfield services company
Baker Hughes Inc (BHI.N) sees a "much better" second half of
2011 in the Gulf of Mexico thanks to resumed deepwater
drilling, pushing its stock up 3 percent.
Chief Executive Chad Deaton said drilling had started on
about half of the dozen deepwater wells with permits, with 11
more permits pending on wells where customers had awarded
service contracts. Analysts, however, remain concerned about
how quickly permits will flow once the backlog is cleared.
Deaton said clients had given plenty of notice on their
plans so his company was able to move people back from where
they relocated after 34 deepwater rigs in the U.S. Gulf had to
halt drilling following last year's Macondo disaster.
"They went to zero overnight, and that puts a real stress
on any company that's big in the Gulf," Deaton said in a
webcast presentation at the Sanford Bernstein Strategic
Decisions Conference in New York on Friday.
Deaton, who steps down at the end of the year, forecast
improvements for the Gulf of Mexico market in the third and
"I think the Gulf is going to be much better in Q3, Q4. It
will not get back up to the 34 rigs, obviously, but we're
hoping to have mid-teens maybe by the end of the year," he
Shares of Baker Hughes, the third-largest oilfield services
company, were up 2.4 percent to $75.34 in afternoon trading,
leading the sector higher. Larger rivals Schlumberger Ltd
(SLB.N) and Halliburton Co (HAL.N) rose between 1 percent and 2
"If it's good news for Baker, it's certainly good for the
others," said Roger Read, oilfield services analyst at Morgan
Keegan & Co.
Renewed activity has yielded early results in the Gulf of
Mexico. Noble Energy Inc (NBL.N) announced this week that it
made a deepwater oil discovery at its Santiago prospect, where
it recently resumed drilling.
Exxon Mobil Corp (XOM.N) plans to move a deepwater rig to
the Gulf of Mexico next year, rig owner Transocean Ltd (RIG.N)
RIGN.VX said last month. That would mark a rare addition to
the region's fleet after a year of departures. [ID:nN12131107]
Seven deepwater rigs moved away, some temporarily, due to a
moratorium that followed the BP (BP.L) Macondo well blow-out
that destroyed Transocean's Deepwater Horizon, killing 11
people and unleashing the largest offshore oil spill in U.S.
Dow Jones Newswires has reported that Chevron Corp (CVX.N)
is likely to add deepwater rigs in the Gulf of Mexico as it
pushes to meet deadlines for projects over the next few years.
But Read said it was likely too early to declare an
all-clear for U.S. deepwater drilling generally, since plans
for future wells were likely to face even more scrutiny.
"The problem with the Gulf is not knowing what the true
post-Macondo permitting is going to look like," he said. "Until
we know how it's going to work out, you've got to be a little
bit concerned that the next wave of permits runs into an
(Reporting by Braden Reddall, editing by Gerald E. McCormick
and John Wallace)