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4 Offshore Drilling Stock Plays

WINDERMERE, Florida (Stockpickr) -- The Obama administration on Tuesday ended the moratorium on offshore drilling in the Gulf of Mexico seven weeks early, after coming under pressure from the oil industry. This was welcome to news to many of the offshore drilling companies that operate in the Gulf. Many of these companies can now return to business as normal and restart their Gulf operations.

The drilling moratorium was put into effect after the Deepwater Horizon drilling rig exploded last April, killing 11 people and causing the largest oil spill in U.S. history.

The administration has said that new rules should help to prevent a similar accident in the future. Some of those new rules include new standards for equipment that must be inspected and certified by an independent engineer. Another rule requires offshore drillers to develop comprehensive workplace safety plans.

Under the new guidelines, an offshore driller must have their CEO certify that any rig that is going to operate in the Gulf must meet all of the new and existing rules. Offshore drilling operations will not be allowed to start until this step taken.

>>Also: 4 Safest Oil & Gas Stocks

Hopefully these new rules and guidelines will help to prevent a future tragedy like the one we saw in April. I think it's safe to say that nobody wins from a tragic oil spill -- not the oil companies, not the local communities and not the political powers.

Not all offshore drillers are jumping up and down about this news. The National Ocean Industries Association released a statement that said: "Our companies remain doubtful that this announcement is anything more than symbolic until permits are actually issued for new drilling."

Michael Bromwich, director of the Bureau of Ocean Energy, said that permits for renewed deep-water drilling are likely to be issued before the end of the year.

If permits do really start getting issued by the end of the year, then investors have plenty of time to start trading and looking for the best opportunities in offshore drilling stocks.

The obvious plays are BP (BP), Transocean (RIG) and Oceaneering International (OII), all of which were involved with the Deepwater Horizon rig. I expect these stocks to continue to lift higher now that moratorium is over. However, all of these names have already put in big runs, so I am not so sure these are the best ways to play the lifting of the ban.

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