How has Deepwater Horizon affected the exploration and production market for offshore drilling rigs?
According to this week’s Houston Business Journal, companies are wanting the latest and safest offshore rigs in part due to last year’s oil spill in the Gulf and also due to the demand for greater flexibility and redundancy with high-spec equipment. Thus we are to expect a surge in two things: dismantlement of older rigs and significant capital spend for the newest rigs. Two Houston-based drillers, Nobel Corp. and Transocean, Ltd., both have rigs currently under construction despite having a quite a number of rigs sitting idle.
What do you think - good bet or bad on the future of offshore drilling? (We think good bet, but we are biased.)