Monday, April 14, 2008

Big Oil’s Rosy Shades

Posted By on Mon, Apr 14, 2008 at 10:02 PM

By: Jeremy Alford 
Two of Louisiana’s largest oil and gas groups briefed lawmakers last week and predicted a vibrant future in which exploration in the Gulf of Mexico hits record highs. Members of the House Natural Resources Committee peppered the groups with questions about what the state can do to help the industry. Fewer taxes and workforce development topped the lists. Chris John, president of the Louisiana Mid-Continent Oil & Gas Association, notes that two recent Gulf lease sales netted more than $6.5 billion. “These aren’t frivolous investments. These companies are going to follow up and spend more money,” John says. “I think the opportunities for Louisiana in the [Outer Continental Shelf] are going to be incredible, but we need to be ready from an infrastructure standpoint, whether that’s roads or bridges or canals.” The largest challenge facing the industry, John told lawmakers, involves workforce development — a top priority for Gov. Bobby Jindal. “We are going to need hundreds of thousands of people in the near future trained in a certain way,” John says, “from computers to engineers to roughnecks — the whole range.” Don Briggs, president of the Louisiana Oil and Gas Association, gave lawmakers a rosy picture, saying historic rig counts in northern Louisiana will continue to grow at astonishing rates with new discoveries, and that Gulf drilling is about to rebound. He says the Gulf rig count has fallen because it’s the “most expensive place to drill in the world.” Briggs assured lawmakers the trend won’t last forever. Independents and majors are finding deepwater drilling in other parts of the world to be unfriendly in terms of geopolitics, Briggs says. The Gulf of Mexico is “politically stable” compared to Venezuela, where oil fields were recently nationalized. “That’s why the Gulf of Mexico is about to become a big place to play,” he says.

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