Louisiana Energy Conference panelists debate future of drilling in Gulf's shallow waters

06 29, 2012 by The Times-Picayune

Executives in the energy industry disagree about the future of Gulf of Mexico shallowwater drilling opportunities, and some companies are beginning to invest in other areas. Investors, executives and others with an interest in the energy business gathered for the second day of the Louisiana Energy Conference Thursday at the Windsor Court Hotel. The panels Thursday morning focused on the business opportunities and future of the shallowwater drilling market.

"Deepwater is at the forefront of our business," said Peter Laborde, a managing member of Laborde Marine, LLC. "It's the future of our industry. (But) the shelf keeps coming back."

Laborde Marine was started in 1995 to provide suppply vessels to rigs. The company works with major oil companies like Conoco, Chevron and Shell. At the moment, despite having a strong presence in the Gulf, Laborde Marine is not looking to expand in the U.S.

"I believe there is going to be an oversupply," Laborde said. "The Gulf market is too cyclical. We are certainly looking at new geographical markets."

John Abadie, executive vice president for Cal Dive International, Inc, agreed with Laborde. Cal Dive provides oil service marine construction work and diving work for the rigs and wells. The company is headquartered in Houston, Texas and is looking at other opportunities in different markets.

"Macondo has demonstrated to us that we were too focused on the Gulf coast," Abadie said. "We've (the company) focused more on international opportunities and expanding our geographical footprint."

The Chief Executive Officer of W&T Offshore, Inc, Tracy Krohn, disagrees with the two men and still believes that the Gulf holds many opportunities. The company's biggest presence is still on the shelf, or in the shallow waters, of the Gulf. However, the company has recently acquired wells onshore in Texas.

W&T Offshore was founded in 1983 and is an oil and natural gas company. In 2005, the company went public and continued to invest in oil and natural gas acquisitions and production. The Gulf of Mexico is responsible for 70 percent of the company's production.

"I don't give a damn if it's oil or gas as as long as we make money," Krohn said. "The Gulf of Mexico will continue to be a focus for us, but we will continue to look for opportunities onshore as well."

Ben Marchive, executive vice president of exploration and production for Energy XXI, said that the company has no plans to move outside the Gulf. Energy XXI is the third largest oil producer on the shelf and 70 percent of the company's production is of oil. Energy XXI is working with New Orleans-based McMoRan Exploration company, building a well in the Davy Jones prospect in the shallow waters of the Gulf. The well is almost as deep as Mt. Everest is high.

"We have a lot of faith that the Gulf will continue to give," he said. "We don't have a desire at this time to go onshore."