AT A GLANCE: Judge Rules Against Deepwater Drilling Moratorium

22nd Jun 2010 20:11

THE NEWS A federal judge in Louisiana on Tuesday ruled against the Obama administration's temporary ban on deepwater offshore drilling, handing a major victory to the oil industry and delivering a stinging rebuke to the White House. U.S. District Judge Martin L.C. Feldman said the Obama administration had trivialized the economic impact of the moratorium. He added that the plaintiffs "have established a likelihood of successfully showing that the Administration acted arbitrarily and capriciously in issuing the moratorium." "Are all airplanes a danger because one was?" the judge wrote. "All oil tankers like Exxon Valdez? All trains? All mines? That sort of thinking seems heavy-handed, and rather overbearing." WHITE HOUSE RESPONSE Press Secretary Robert Gibbs said the White House will "immediately" appeal the ruling. Gibbs, at a White House press briefing, said President Barack Obama strongly believes that "continuing to drill at these depths without knowing what happened does not make any sense." Obama and other administration officials have said the halt is necessary to give the government time to investigate the causes of the BP PLC (BP, BP.LN) oil spill in the Gulf of Mexico, and consider what new safety measures the industry and regulators should take to prevent a similar accident. THE LAWSUIT The judge's decision comes in response to a lawsuit filed by Hornbeck Offshore LLC, a small oil-services companies in Covington, La., that said it would be crippled because of the six-month ban, decreed on May 28 by the Department of Interior in the wake of the spill at a well owned by BP in the Gulf of Mexico. Hornbeck was soon joined by other oilfield service companies, and got support from the state of Louisiana, underscoring the growing rebellion against the moratorium in the Gulf Coast, where the energy industry plays a significant role. MARKET REACTION Shares of companies with deepwater operations jumped immediately after news of the judge's ruling, though quickly came off those highs. Diamond Offshore Drilling Inc. (DO), which filed a similar lawsuit Friday, was down 3.2% to $62.68 in recent trading, after jumping to $68.65. BP shares fell in the U.S. and London as investors continued to worry about the extent of the oil giant's potential liabilities for spill. BP's American depositary receipts were recently down 2% to $29.71. In London, BP shares closed 4.4% lower. BP EXEC WARNS ON EXCESSIVE REGULATION Earlier Tuesday, BP Global Chief of Staff Steve Westwell said it would be a mistake if the regulatory response to oil spill created an environment in which investment in deepwater oil production becomes impossible. "Companies have been drilling in deep water in the Gulf Of Mexico for 20 years and until now have had a good safety record," he said at the World National Oil Companies Congress in London. COLLECTION EFFORTS BP said it hit a record in the amount of oil collected from the broken Macondo well by flaring off more oil as it works to keep it from spewing into the Gulf. On Monday, BP collected a total of 25,830 barrels, the company said on its website Tuesday. BP flared 10,270 barrels of oil and captured 15,560 barrels. For more coverage of the oil spill, please search under the code BP for these stories: -Federal Judge In Louisiana Rules Against Offshore Drilling Moratorium -White House To Immediately Appeal Ruling Against Offshore Drilling Ban -BP Shares Slump In US, London On Continued Liability Worries -BP: A Record 25,830 Barrels Total Oil Recovered On Monday -WSJ/The Source:BP Magazine Discovers Bright Side To Oil Spill -BP To Give Macondo Oil Revenue To Wildlife Group, Not New Fund -Anadarko's Bid To Blame BP For Oil Spill Faces Challenges -US House To Vote On Subpoena Power For Oil-Spill Panel -US Seeks Use Of Other Oil Companies' Assets To Contain Spill -MARKET TALK: Oil Companies Down, Despite Moratorium Ruling -MARKET TALK: Storm Poses Threat To Gulf Cleanup--Forecaster -BP CEO Cancels Speech At Oil Conference -MARKETWATCH VIEW: BP CEO May Be Trying To Get Fired, Really -THE DRILL: Et Tu, Anadarko? -BP:Mistake To Discourage Investment In Deep-water Oil (END) Dow Jones Newswires June 22, 2010 15:11 ET (19:11 GMT)