Monday, August 9, 2010

Shipbuilders, repair shops feel pain of Gulf drilling ban

GALVESTON, Texas — The effect of the government's moratorium on deep-water oil and gas drilling is evident here at an almost deserted boat dock.
Normally, two or three boats that service offshore oil rigs would be here, getting equipment or repairs. On a recent Saturday, there was one. Craig Marston, general manager of the 80-employee Malin International Ship Repair, didn't have any oil-related clients scheduled to come in. Instead, he's bracing for a 30 percent to 40 percent drop in business in the next few weeks as the full impact of the moratorium, in its third month, sets in.

"A quarter of my work force is at risk (of layoffs) right now," Marston says.

The BP oil spill, which is having a diminishing effect on the Gulf of Mexico's water, continues to wreak havoc on the offshore oil and gas industry and the businesses that service and supply it. Of the 33 deep-water rigs in the Gulf, 24 have been idled by President Barack Obama's moratorium, which was imposed to beef up safety. Several rigs have left for work in other parts of the world. Government permits for shallow-water drilling have slowed, too. Less drilling means less business for hundreds of companies from Texas to Alabama, including shipbuilders, repair shops and those that supply boats to service the rigs.

The moratorium's full impact has yet to be felt. Some companies picked up business because many boats were enlisted to work on the spill. Malin was one of them, getting a 20 percent bump in business, Marston says. But that work is lessening now that the well has been capped.

Boat company Laborde Marine of Morgan City, La., has eight of its 21 boats enlisted in spill response, says Jimmy Skiles, Laborde executive vice president.

"It's been pretty good for us," he says. The unknown is how long the moratorium will go and how intense new safety requirements will be for offshore drilling, which may slow projects, Skiles says.

"Everybody feels like the hammer is going to fall. We just don't know when," Skiles says.

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