April 30, 2010, 4:18 PM EDT
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(Updates share moves starting in second paragraph.)
By Edward Klump
April 30 (Bloomberg) -- Transocean Ltd., Halliburton Co. and McMoRan Exploration Co. dropped in New York trading after President Barack Obama’s chief strategist said no new offshore drilling will be allowed until this month’s Gulf of Mexico oil spill is investigated.
Transocean, whose Deepwater Horizon rig caught fire and sank last week, tumbled $6.19, or 7.9 percent, to $72.32 as of the 4 p.m. close of New York Stock Exchange composite trading. Halliburton, the second-largest oilfield contractor and a service provider on the Deepwater Horizon, declined 3 percent to $30.65. McMoRan, a New Orleans-based oil and gas producer that’s drilling in the Gulf, dropped 8.6 percent to $11.94.
About 5,000 barrels of oil are leaking into the Gulf, five times more than previously estimated, from the BP Plc well that the Deepwater Horizon was drilling at the time of the blast, which killed 11 rig workers. White House senior adviser David Axelrod said today on ABC’s “Good Morning America” that additional drilling won’t be authorized until it’s determined what happened on the Transocean rig.
“It’s a shoot first, ask questions later type of environment,” said Ted Harper, who helps manage about $6 billion at Frost Investment Advisors in Houston. “You had some very strong reports and decent outlooks, and then we kind of get this event in the Gulf, which has only proceeded to get from a headline standpoint worse by the day.”
Spill Safeguards
Future leases of U.S. oil-exploration tracts will require safeguards designed to prevent a spill similar to what happened at the BP well, Obama said today at a White House press conference. The president said he directed Interior Secretary Ken Salazar to conduct a thorough review of the BP leak and report back with recommendations in 30 days on ways to prevent another such spill.
Gulf Coast states are preparing as the expanding oil slick drifts toward land. The explosion may have been caused by a blowout, an unexpected surge in pressure that ejected petroleum at the top of the well, Transocean said last week.
London-based BP, which has a 65 percent stake in the leaking well, fell 1.5 percent to 575.5 pence in London. Cameron International Corp., the Houston-based company that said it provided so-called blowout preventers for the Deepwater Horizon, rose 2 percent to $39.46 after plunging 13 percent yesterday.
‘Bumpy Ride’
“Anything that’s certainly directly tied to this accident is going to have a bumpy ride because you can’t ascribe or define what your ultimate liabilities may be here,” Harper said.
The Woodlands, Texas-based Anadarko Petroleum Corp., which has a 25 percent stake in the BP well, dropped 7.7 percent to $62.16. Drillers, equipment makers, service providers and producers including Noble Corp., FMC Technologies Inc., Energy XXI (Bermuda) Ltd. and Diamond Offshore Drilling Inc. all fell more than 3 percent.
“This is a politically hot-potato sector that’s going to have headwinds here for a bit until this well stops leaking,” said Roger Read, an analyst at Natixis Bleichroeder in Houston. “That could be tomorrow if it caves in, or it could be six to eight weeks if it takes that time to drill the relief well.”
Houston-based Halliburton said today that at the time of the explosion, well operations hadn’t yet reached the point requiring the placement of the final cement plug that would enable the planned temporary abandonment of the well.
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