The offshore oil drilling industry will attract increasing numbers of government connected firms in the 1990s according to Ronald Tappmeyer Vice Chairman of Reading and Bates Drilling Co. Tappmeyer told the Offshore Technology Conference that contract drilling was reaching the same kind of situation that oil producing companies reached when their oilfields were nationalized in nations as Venezuela Iran and Saudi Arabia. He said local connections to the nation whose waters are being drilled was an increasingly important factor in the market. We have seen contractors put at competitive disadvantages in nations in which they had worked successfully for years essentially moved aside to make room for locally-owned firms or a locally-built rig he said. Tappmeyer who is president of the International Association of Drilling Contractors said how far the trend would spread depends on the growth of trade protectionism. He added that international contractors will increasingly find their role restricted to regions that require special expertise and experience such as wildcat areas and severe environments such as in the Arctic and extremely deep waters. Tappmeyer also said he expects producing companies to provide the main financing for offshore drilling in the coming decade as banks will be unwilling to repeat overexposing themselves and drilling contractors will have difficulty providing financing out of cash flow. At the same time he said he saw the financing as indirect as he does not see producers getting back in the rig-owning business. He also said projectfinancing will have to be backed up by work commitments to guarantee the payoff of construction costs. For the time being he said there was a superabundance of rigs. But he said there will be a need for new technologically advanced rigs within a few years. He said the floating-drilling rigs were most likely to benefit from new developments in technology adding that by 2000 there should not be an ocean left that is too deep too cold too stormy or too remote to be explored.
GOVERNMENTS SEEN MORE INVOLVED IN OIL DRILLING