Exxon Says `$25 Billion Rule' Will Sink Deepwater Oil Drilling

The world’s biggest oil explorers have bitterly contested a U.S. plan to toughen offshore drilling rules that Exxon Mobil Corp. said will cost as much as $25 billion over 10 years and render many offshore discoveries worthless.

The Obama administration issued sweeping new regulations Thursday as part of an effort to reduce the number of well blowouts after the explosion aboard the Deepwater Horizon rig in 2010.  The government has pegged the rules’ costs at less than $1 billion.

The changes arrived amid the worst oil slump in a generation.  ConocoPhillips and Chevron Corp. have already abandoned some Gulf prospects because they wouldn’t be profitable at current prices.  Before the final regulations were announced, consulting firm Wood Mackenzie Ltd. predicted they would cause exploration outlays in the Gulf to tumble by 70 percent over the next two decades, wiping out as many as 190,000 jobs.

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