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Gulf of Mexico oil drillers will be busier this year than at any point since the BP oil spill in 2010 that upended their industry and soiled their reputation along with parts of the marshy Louisiana coast. Eight more deepwater rigs are expected in the Gulf this year, based on what oil companies tell contractors including Transocean, Ensco and Seadrill.
Such an influx would bring the active deepwater count to 29, just short of the level before the well blow-out two years ago this month that killed 11 people and destroyed a Transocean rig.
The rebound can not come soon enough for companies that rely on the drilling business. While the increasingly varied economy of southern Louisiana may be recovering, no sector pays like oil and gas. Energy has been part of the state's commercial fabric since the first offshore boom during the 1970s oil crisis, when crude was much cheaper than it is now.
More Gulf activity could help President Barack Obama, ahead of the November 6 election, as he tries to fend off charges from some Republicans and the industry that drilling has not recovered after the spill due to new rules and slow permitting.
The Obama administration imposed a four-and-a-half-month moratorium on deepwater drilling after the oil spill. That gave way to a longer spell when regulators grappled with stricter rules and allowed little drilling to take place - oil men deride that period as the "permitorium."
In New Orleans, a city already enlivened late last month by the NCAA college basketball championship at its colorfully lit and now Mercedes-sponsored Superdome, the mood at a big annual oil conference across town was notably brighter.
"Our customers still see the Gulf of Mexico as an attractive place to do business," said Steven Newman, head of Transocean, the world's largest rig contractor. "We view the Gulf of Mexico today as a net importer of rigs, rather than a net exporter."
The pace of permitting remains choppy. Business group Greater New Orleans Inc found that an average of three permits a month were approved in the November to January period, compared with nearly six a month in the year before the spill.
The aftermath of the oil spill has been a tough period to work through, even in an industry known for its cycles. A deepwater rig employs up to 400 people, from crew to cleaners to cooks, and the industry says each rig supports double that when indirect jobs are included.
Louisiana is home to 1,777 small oil and gas firms, with $4.2 billion in combined annual revenue, and a survey of about 100 found that half had to let people go in the past two years, while more than three-quarters ate away at cash reserves or owners' personal savings, according to Greater New Orleans Inc.
Lori Davis, president of family-owned oil services firm RIG-CHEM, said residents of Houma, south-west of New Orleans, stopped spending on the "extras" in life, from charitable donations to vacations.
"People were only doing what was necessary," she said, which compounded the woes of residents relying on fishing after the spill. "Many people had family that were in the seafood industry."
Davis felt lucky to have lost only a few employees, given the aggressive expansion of other companies before the spill.
"We were supposed to be in a boom - things were really in an upswing," she said. "We were able to put on the brakes. I'm sure there were a lot of people that weren't as fortunate."
Dotted around New Orleans are billboards promoting claims services for victims of the BP spill, though Davis noted that was only an option for individuals, not for businesses such as hers that suffered due to the shortage of permits.
But Elgie Holstein, who was oil spill response co-ordinator at the Environmental Defence Fund, said a serious review of drilling practices was vital given the lives lost in April 2010, even if not everyone was happy with the delay.

Copyright Reuters, 2012

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