Energy executives believe Gulf of Mexico market will remain strong

06 28, 2012 by The Times-Picayune

Even with strict regulations controlling drilling in the Gulf of Mexico, executives from the industry believe that the market will remain strong and continue to grow in the next few years. Investors, executives and others with an interest in the energy business gathered for the first day of the Louisiana Energy Conference Wednesday at the Windsor Court Hotel. During the two-day conference 18 panels will discuss issues facing the business and possibilities for the future.

The panels Wednesday morning focused on the continued effects of the 2010 spill from BP's Macondo well and how that has changed the industry with more regulations controlling the issuing of permits and the standards of equipment.

"Macondo woke everyone up," said Todd Hornbeck, President of Hornbeck Offshore Services. "It made us recognize as an industry that we have to work together to control the message coming from the industry."

Hornbeck Offshore Services operates supply vessels that support offshore drilling. The company was founded in 1997 and went public in 2004. He said that the image of the industry needs to be changed and that can only happen with companies working together.

"The regulators don't understand the technology we deal with," Hornbeck said. "Since Macondo, the tone is resistance of technology and they dampen our ability to do our jobs. They need to understand what they are regulating."

Paul Wieg, Director of Exploration and Geoscience Technology for Stone Energy Corporation, also said Macondo has continued to impact the industry. Stone Energy Corporation is headquartered in Lafayette and is an independent oil and gas company. Wieg still sees growth in the future. In 2011, the company was recovering from the hit that deepwater drilling took in the Gulf. But the company has high expectations for 2012 and will continue to invest in deepwater drilling.

"We held on after Macondo," Wieg said. "We want to commit more dollars to deepwater drilling."

Wieg thinks the likelihood of another Macondo incident is slim because of the equipment and technology now in place on rigs.

"Macondo was such an unusual circumstance," he added. "We have processes in place for everything we do. We have equipment in place that would reduce the cost of an event like that. The risk exposure is less because we have contingencies available to us."

Hornbeck said that the Gulf of Mexico oil industry has a lot of opportunities for high-paying jobs and that there is a need for more professionals in the field. More people are needed because of the intensity level of getting equipment up and running, he added. Companies are putting more people on the vessels.

"To build people in our industry it takes seven to eight years," Hornbeck said. "It's not a problem money can solve, it takes time and training."

Wieg acknowledged that there is a shortage of workers, especially petroleum engineers. Companies will have to recruit from colleges and invest more in working with universities to train and educate students in the field. The oil industry is facing a shrinking workforce and an increased competition for resources, he said.

"We're faced with the same problem across the various sectors of the industry," Wieg said. "How do we get kids to study petroleum engineering? That's another problem."

Despite the challenges facing companies, both believe the market in the Gulf of Mexico for drilling is strong and will continue to grow.

"The Gulf of Mexico is not only back, but it's one of the hottest markets in the world," Hornbeck said.