The federal government's top offshore-drilling regulator said yesterday that the Obama administration might lift its moratorium on deepwater exploratory drilling early for certain types of rigs.

Michael Bromwich, head of the Bureau of Ocean Energy Management, Regulation and Enforcement, told the presidential commission investigating the BP PLC disaster that his agency may decide that "certain categories of rigs present fewer risks than others and are sufficiently safe to allow the moratorium to be lifted with respect to those categories of rigs."

The bipartisan spill panel is meeting this week in Washington to discuss the possibility of creating a self-regulating agency for the offshore oil and gas industry. And some panel members have questioned the blanket drilling ban, which is also being challenged in federal court.

Bromwich's comments came in response to a letter from the panel's executive director earlier this month questioning the bureau's implementation of new drilling safety requirements and the agency's review of rigs included in the ban.

The new chief of BOEMRE said he still prefers a "systemwide" approach for ramping up offshore drilling safety, but he left the door open to allowing some projects to proceed before the moratorium ends in late November.

"We believe that system-wide rules designed to enhance safety in specific ways is the best means to raise safety standards throughout the industry and minimize the chances of another incident such as Deepwater Horizon," Bromwich wrote in a letter to the commission. "We believe that this approach -- rather than focusing on rig-by-rig inspections performed against the backdrop of shifting regulatory requirements -- is a more coherent approach to improving the level of safety in deep water."

Spill could change face of industry -- report

The political response to the Gulf of Mexico oil spill could change the face of the offshore drilling industry, prompting consolidation and reducing production, a new report says.

Tougher liability rules, increased insurance costs, higher penalties, tougher permitting requirements and other rules will change the way the industry operates, the report from tax and advisory firm Grant Thornton says.

"As all of the costs associated with operating in the Gulf continue to rise, deepwater drilling will increasingly become the province of only the largest, most well-capitalized companies," said Rob Moore, a director in Grant Thornton's Corporate Advisory and Restructuring Services practice and co-author of the study, in a statement. "We'll also likely see a wave of mergers and acquisition activity across the E&P industry that will leave deepwater Gulf drilling concentrated among a handful of large energy companies as smaller players get absorbed through strategic purchases or wind down their operations."

And that consolidation could result in decreased production, the report says.

"Large, integrated oil and gas companies will now have even more properties to evaluate; consequently, mature fields and declining wells will likely not receive the attention needed to maximize the production of these fields," the report says.

Click here to read the report.