UPDATE 1-Offshore US drilling could help oil cos, drillers

(Adds comment from oil industry group, paragraphs 8-9)

By Michael Erman

NEW YORK, June 18 (Reuters) - President George W. Bush's proposal to end a long-standing ban on oil drilling off the U.S. coasts could be a boon for oil companies and the service companies that help them drill for oil and natural gas.

Bush urged Congress to end the ban on Wednesday, arguing that policies that keep oil companies from developing possibly productive regions have played a role in driving oil prices above $130 a barrel.

Drilling is currently allowed only in the western and central Gulf of Mexico -- offshore Texas, Louisiana, Mississippi and Alabama -- and offshore Alaska.

The oil companies who already have offshore projects in the United States, like Chevron Corp (CVX.N: Quote, Profile, Research, Stock Buzz), ConocoPhillips (COP.N: Quote, Profile, Research, Stock Buzz), BP (BP.L: Quote, Profile, Research, Stock Buzz), Exxon Mobil Corp (XOM.N: Quote, Profile, Research, Stock Buzz) and Murphy Oil Corp (MUR.N: Quote, Profile, Research, Stock Buzz), would be the first beneficiaries of an end to the moratorium, analysts said.

Still, the real impact of any new policy is unknown and depends on how it would be implemented and, more importantly, what's in the ground. Plus, it could take a decade or more to find the oil and produce it.

"It's a huge opportunity because there's a tremendous amount of acreage involved. But the magnitude of the opportunity -- the magnitude of what's there -- is strictly conjecture," said Howard Weil analyst Gene Gillespie.

Top oil company executives have long called for an end to the moratorium, saying the lack of access to key oil and gas reserves is one of the toughest challenges facing the industry.