Knock-on effects of US drilling ban could be long-lasting

What longer-term implications could the moratorium on new drilling in the Gulf of Mexico have on production costs and supply amid uncertainty over new regulations asks Pauline McCallion

The six-month US government ban on new drilling in the Gulf of Mexico could have various knock-on effects as operators try to cushion the blow of potential regulatory tightening, according to experts. The temporary ban imposed in May could be lifted in November 2010 with only a modest impact on supply, but the long-term regulatory burden remains unknown and could lengthen lead times, increase costs and change project economics, they say.

Kenneth Austin, senior credit officer at ratings agency