Drill baby drill.
President Trump just signed an executive order that might open up millions of coastal acres for oil and gas drilling.
The directive is called The America First Offshore Energy Strategy and its purpose is to review regulations and the permitting process for exploration on the outer continental shelf.
“This order will cement our nation’s position as a global energy leader and foster energy security for the benefit of American people without removing any of the stringent environmental safeguards that are currently in place,” said Interior Secretary Ryan Zinke.
This is a massive blow to the Obama era EPA hegemony. Perhaps the effects will not be seen in stocks today, but this is a net positive for any offshore driller, such as RIG, OII and RDC. May of them have already gone bankrupt. But this might rejuvenate the sector.
President Trump signs an executive order to roll back regulations on offshore drilling https://t.co/srZkon5vql
— CNN Politics (@CNNPolitics) April 28, 2017
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Does that affect CA?
Not good for oil prices if Trump opens up offshore drilling and Federal lands like he has said. Then again, a major price drop is what is needed to complete the shakeout of all the marginal players (and their financers) before oil stocks can become investable long-term.
Yup, more supply. Good for consumers like me who own three SUV’s.
A BP scale accident in the next 4 to 8 years could change the optics.
Accident? Seemed like an act of terror at the time. I’m taking this move by Trump as an indication that he believes the days of Financial Terrorism have ended. I hope he has good intelligence.
Significant offshore drilling is basically dead until the fracking plays start to fizzle out.
From what I can glean, production costs for fracking accessible oil continue to drop. Deep water offshore… not so much.
You are correct. Contractors that do fracking onshore are a dime a dozen so it has been a race to the bottom on pricing there. Contractors that specialize in deepwater work have a bit of a niche and have not dropped pricing nearly as much as their onshore counterparts.
The exception is the drillers. Deepwater drillers that were signing $500K per day rates back in 2013 are happy to get $200K per day today. Some of them are going as low as $150K per day now. Two years ago you could not get a jack-up rig for that rate.
Who the fuck in their right mind wants to drill for a precious
resource, so they can export it?
I can predict the conversation in the year 2117:
“Daddy, what happened to all of America’s precious oil that
was under American ground and in our offshore areas?”
“Well son, your great-great grandfather and his friends took
it out of the ground, and exchanged it for worthless pieces
of paper”.
It’s worked for the Saudi Royal family pretty good over the last umpteen years.
End of the day, this is another Trump Executive Order that won’t mean shit a couple of months from now.