Fitch says Gulf oil spill will have long-term impact on small drilling companies

Fitch: Oil spill to affect smaller drillers

CHICAGO — Fitch Ratings said Friday that the current moratorium on deep water drilling after the massive oil spill in the Gulf of Mexico will have a greater impact on smaller producers than larger drilling companies.

The ratings agency said in a report that the overall short term impact of the Obama administration’s six-month halt to new permits for deep-sea oil drilling will be limited.

But it estimated that smaller, independent companies with fewer drilling assets will feel the effects more acutely than larger drilling firms.

The bigger companies have a broader mix of facilities, including many outside the Gulf where they can shift operations, Fitch wrote. It also said that the bigger companies have greater financial resources to bear the costs of the temporary ban.

Fitch said it is unclear how the spill and the moratorium will affect credit markets for deep water drilling companies. The agency wrote that smaller producers may face pressure about whether they can cover the costs of oil spills in the longer term.