The rebound has come quietly but it the pace of drilling is slowly increasing. The government is moving at a snail's pace to approve new permits but the time it takes to drill a well is much longer.
Drilling has returned almost to normal levels in the Gulf of Mexico. There are currently 23 active rigs drilling in water over 3,000 feet deep. The BOEMRE has increased its demand for safety concerns and it has taken a while for companies to adjust to the new requirements but permits are being issued.
Anadarko (APC) said last week it was very excited about the pace of new permits and said the Gulf would be their largest resource base in the years to come.
Deepwater wells encounter extreme pressures and the BOEMRE is requiring stronger blow out preventers, safety checks, certifications by outside engineers and a spill containment system before they will issue a permit.
After the JIT report earlier this week on the problems encountered in the Macondo review they are going to increase requirement even more. The JIT listed 57 "findings" of cause and contributing events in the Macondo disaster. They are going to attempt to fix as many of those as possible through regulation.
The BOEMRE is also implementing a new system for permits that will reduce delays by making the initial permit applications more complete. More red tape but it will reduce the number of returns for missing data.
BHP and Chevron both announced new finds last week in more than 4,000 feet of water. Together they are expected to contain several billion barrels of oil. That will keep production flowing from the Gulf for a long time. There are several other promising wells in progress that could add to this bonanza.
There are four recent discoveries of more than one billion barrels of recoverable oil. New seismic capabilities now allow explorers to look below previously restrictive salt canopies.
Phil Weiss, an analyst for Argus Research, projects that the finds by Chevron and Billiton, as well as a recently disclosed one by Exxon Mobil Corp., could each add between 100,000 and 200,000 barrels of oil a day to production.
BP is still active although they are keeping a low profile. Several permits have been issued to other companies that are "partners" with BP. Apparently BP feels it is better to be a silent partner today rather than the lead operator.