Forget the deepwater drilling moratorium in federal waters of the Gulf of Mexico. Louisiana is still open for business and it wants to welcome the oil and gas industry with open arms. Under the leadership of Billy Nungesser, Plaquemines Parish president, all the coastal-parish presidents have agreed to ask Gov. Bobby Jindal to do what it takes to attract more drilling activity in shallow parish and state waters.

"We are asking the governor to lower the state royalty rate on production from 22% to 12%, for all wells drilled deeper than 15,000 feet on the shallow shelf," Nungesser says.

"We are on a mission to make deep gas more attractive for companies to go after. We just want everyone to get back to work. All the coastal parishes are on board."

Nungesser put together his plan for royalty relief before the BP oil spill and approached Louisiana Gov. Jindal then. He was reportedly reluctant to grant royalty breaks in a recession, but when he learned that he did not have to go through the state legislature to do so, he gave the idea another look. Since the spill, Nungesser and the governor have discussed the idea again. Jindal says he wants to know which companies would actively take advantage of the change by drilling.

Nungesser says he has contacted operators with leases or drilling activity in shallow waters such as McMoRan Exploration Co., Saratoga Resources and Century Oil & Gas. Less than 15% of the state's shallow waters are under lease.

BillyAtDesk

Billy Nungesser, Plaquemines Parish president

Saratoga president Tom Cook says the company has identified eight huge structures in Grand Bay area alone, that could hold up to 10 trillion cubic feet equivalent of gas potential. They appear to be on trend with McMoRan's deep-shelf gas discoveries such as Davy Jones and Blackbeard. "If they were in South Texas, they would have been drilled years ago," he says.

Nungesser wants to change that, and boost economic development at the same time. "There are a lot of opportunities in shallow waters of the state. It doesn't make sense for an oil company to pay 22% royalty there when they can go out three more miles into federal water and pay less, or get federal royalty relief.

"We've got to do everything we can to kick-start activity in these shallow waters. If the state government for some reason can't act on this, I will have something for local incentives here in Plaquemines. We've got 30 years of production down here and enormous fields, more than any other parish. We can't forget, and shouldn't forget, that the oil and gas industry is our bread and butter, that it contributes to our life style.

"We need to step up to the plate and nourish the oil and gas industry. Some criticize me and say it makes no sense for oil companies to ask for relief when we are in a recession. That's why I am asking, so the oil companies don't have to."

Nungesser is no stranger to the oilfield. His father operated an offshore catering business for many years and he, himself, owned a company that made modular, portable housing for offshore installations. He sold it in 1998 to Oil States International Inc.