May 28, 2010 / 4:01 PM / 9 years ago

Drilling ban hits rig, oilfield service stocks

HOUSTON (Reuters) - Shares of companies that lease drilling rigs including Transocean Ltd (RIGN.S)(RIG.N) and oilfield services firms like Halliburton Co (HAL.N) fell on Friday on worries about financial fallout from the U.S. government’s 6-month ban on new deepwater drilling permits.

The moratorium, put in place in response to the April 20 well rupture in the Gulf of Mexico, will result in lost revenue for companies that provide services on deepwater drilling rigs and may depress day rates for drilling rig contractors, analysts said.

The 6-month moratorium “will have a huge near-term negative impact to the Gulf Coast deepwater oil service industry,” Bernstein Research said in a note to clients on Friday.

The Philadelphia Stock Index of oilfield service companies .OSX, that also includes world’s largest Schlumberger Ltd (SLB.N), fell more than 4 percent in late morning trading on the New York Stock Exchange.

By comparison, the Chicago Board Options Exchange index of oil companies .OIX was 1.3 percent lower.

On Thursday, the U.S. government extended a moratorium on new drilling permits to 6 months and announced a safety crack-down that includes the temporary suspension of exploratory drilling on 33 rigs.

Shares of companies that were involved in the Macondo accident that sunk the Deepwater Horizon rig and killed 11 workers also dropped on Friday, even as efforts to control the crude gushing from the well showed some success.

Shares of BP Plc (BP.L) (BP.N), the operator of the well with a 65 percent working interest, were off nearly 5 percent in London trading. Anadarko Petroleum Corp APC.N shares fell 4.9 percent on the NYSE. Anadarko has a 25 percent interest in the well.

Anadarko also has an active deepwater drilling program in the Gulf of Mexico and Transocean owned the Deepwater Horizon.

Reporting by Anna Driver in Houston; Editing by Tim Dobbyn

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below