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Report: Rigs take record hit from Rita
Damaged, lost rigs used for exploration may delay discovery of new global oil supplies, paper says.
September 28, 2005: 8:12 AM EDT

NEW YORK (CNN/Money) - Hurricane Rita caused record damage to offshore oil and natural gas rigs, according to a published report, and that could delay exploratory drilling planned to meet the world's growing appetite for oil.

The Financial Times cited market intelligence firm ODS-Petrodata as saying the storm that hit near the Texas-Louisiana border early Saturday will cause a shortage of rigs off the Gulf Coast this year. Rigs are movable and used for exploration and development, as opposed to platforms, which are fixed and used to extract oil from established offshore reserves.

The newspaper reports that the hit taken by rigs could delay exploration drilling as far away as the Middle East.

"Based on what we have right now, it appears that drilling contractors and rig owners took a big hit from Rita," ODS-Petrodata's Tom Marsh told the newspaper. He said that while Hurricane Katrina hit an area where there were mostly mature oil and gas platforms, "Rita came to the west where there is a lot of (exploratory) rig activity."

The newspaper reports that according to the Coast Guard, nine semi-submersible rigs have broken free from their moorings and were adrift. Numerous drillers, including Global Santa Fe (Research), Transocean (Research), Noble Corp. (Research), Diamond Offshore Drilling (Research) and Rowan Companies (Research), have reported missing or damaged rigs from Rita.

Rigs were in short supply even before the hurricanes, the newspaper reports. They cost $90 million to $550 million, and a rig ordered today to replace a damaged or destroyed rig won't be available before 2008, according to the report.

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For more news on this year's oil crunch, click here.  Top of page

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