Oil Chiefs Leave Meeting with Interior 'Disappointed'

WASHINGTON (Dow Jones Newswires), June 29, 2010

Executives from oil and gas companies on Monday concluded an hour-long meeting with U.S. Interior Secretary Ken Salazar without securing promises from the government to lift a deepwater-drilling moratorium imposed after a disastrous BP oil spill.

The meeting included executives from BP, Exxon Mobil; Chevron; Noble Energy, Transocean; Diamond Offshore Drilling; Hercules Offshore; Rowan; and Seakhawk Drilling, according to a person familiar with the matter. The heads of the American Petroleum Institute and the National Ocean Industries Association, trade groups for the industry, also attended the meeting at the Interior Department.

"Numerous operators told Secretary Salazar that they were in the final stages of moving rigs, deepwater rigs out of the Gulf of Mexico and to West Africa and the Middle East," according to a person familiar with the matter. "We were frankly disappointed at the lack of serious attention that was paid by the Department of the Interior on the horrible economic impact that the Department of Interior's policies are having on the industry and on communities along the Gulf Coast."

Interior spokeswoman Kendra Barkoff confirmed that the meeting, which also included Michael Bromwich, the new head of Interior's Bureau of Ocean Energy Management, Regulation and Enforcement, had occurred. She declined to comment on the substance of the meeting.

The moratorium, which is tangled up in court, has been in place since late May, when President Barack Obama announced that he wanted a ban on new exploratory wells while a presidential commission studied how to ensure that offshore drilling could be made safer. The six-month ban had the effect of suspending activity at all 33 rigs developing exploratory wells in deep water. It also posed new hardships for the hundreds of oil-services companies, already hurt by an economic recession, that supply the steel tubing, engineering services, drilling crews and marine-supply boats critical to offshore exploration.

House Democrats leading a probe into the BP oil spill in the meantime put new questions to the chiefs of the other oil companies. In letters to the executives of Exxon, Chevron, Shell and ConocoPhillips, House Energy and Commerce Committee Chairman Henry Waxman (D, Calif.) and two subcommittee chairs asked the executives whether their oil-spill response plans in the Gulf of Mexico "were adequate to protect the Gulf region from the consequences of a subsea blowout similar to the blowout" at BP's Macondo well.

The lawmakers asked for a response by Friday, July 2. Oil-spill response plans are among the factors being weighed by the Obama administration as it considers whether to revise the moratorium.

Salazar has told lawmakers Wednesday that he is considering issuing a new, scaled-back moratorium that would replace a moratorium that was struck down last week by a federal judge. The Justice Department has appealed the decision, asking a court to allow the ban to remain in place during a legal challenge.

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