UPDATE 2-Diamond moving 2nd rig out of US Gulf, Congo-bound

Mon Jul 12, 2010 11:57pm GMT

* Ocean Confidence left at weekend, but due to come back

* Murphy had declared force majeure on the rig

* Diamond said Friday it would move another rig to Egypt

* Industry expects a few more rigs to follow (Adds comments from analyst and Oceaneering International executive, background)

By Braden Reddall

SAN FRANCISCO, July 12 (Reuters) - Diamond Offshore Drilling Inc (DO.N: Quote) said on Monday it would move a second deepwater rig out of the Gulf of Mexico to waters off the Republic of Congo due to a U.S. drilling moratorium, and the industry expects others to follow.

The U.S. government issued a revised moratorium on deepwater oil drilling on Monday, which it said would last until Nov. 30. An earlier drilling suspension, issued on May 27, was lifted by a U.S. Appeals Court on July 8. [ID:nN12269656]

The government had imposed the six month moratorium on drilling in water more than 500 feet deep after the April 20 blowout on a Transocean Ltd-owned RIGN.VX (RIG.N: Quote) rig operated by BP Plc (BP.L: Quote) that caused a catastrophic oil spill.

Diamond's move is with the same customer, Murphy Oil Corp (MUR.N: Quote), but the old four-year contract running to March 2012 has been restructured into a one-year Gulf of Mexico commitment set to restart when Murphy feels it can get permits and meet regulatory requirements.   Continued...

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