Washington (Platts)--7Sep2011/315 pm EDT/1915 GMT

Twenty deepwater drilling rigs would leave the Gulf of Mexico if US regulators do not accelerate permitting, investment bank FBR Capital Markets said Wednesday.

The analysts blamed the Bureau of Ocean Energy Management, Regulation and Enforcement's sluggish pace on higher safety standards enacted after the BP Macondo well blowout in April 2010, not politics.

"Rather than being political, the GOM permitting drag is more reflective of the increased work required to issue each permit and the limited bureaucratic resources available," the report said. "As a result, we continue to expect continued slow recovery of the deepwater permitting rate."

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Chevron CEO John Waters agreed Wednesday that BOEM was not "slow walking" permits.

Watson said he believes the backlog in deepwater permits is due to regulators not having enough resources to process the increased amount of information required in applications since enacting tougher standards after BP's Macondo disaster.

"I do not believe Director Bromwich is slow walking permits," Watson said at an event in Washington, referring to chief drilling regulator Michael Bromwich. "I know the BOEM has taken criticism. They are working very hard to process," the permits. "The bar has been raised. We need to fund that agency."

FBR called the active rig count -- 20 at the end of August -- "unsustainable" at the current pace of permit approvals. The Gulf of Mexico stands to lose eight to 20 rigs -- eight if permitting speeds up and 20 if the pace stays the same.

The report said the backlog of permits approved, but not acted upon needs to reach about 60 to support an active rig count of 20. Between 2006 and 2010, the industry had about three times the number of permits waiting for action than the number of deepwater rigs at work.

"When BOEMRE voided legacy drilling permits post-Macondo, it created a bigger problem than most realize," FBR said.

Many deepwater rigs stayed active in the Gulf of Mexico despite the six-month drilling moratorium imposed during the BP disaster with work that did not require deepwater permits. Those jobs are dwindling, FBR said.

"While we have no data on exactly how much non-drilling backlog remains, it's clearly being worked through rapidly with an active rig count that's roughly double what the backlog of drilling permits would seem to support," the report said.

Twelve deepwater rigs have left the Gulf of Mexico since June 2010: