Dig Into Deepwater Plays

This column was originally published on RealMoney on March 7 at 1:08 p.m. EST. It's being republished as a bonus for TheStreet.com readers. For more information about subscribing to RealMoney, please click here.

Pemex, the world's third-largest producer, is at last starting to ramp up spending for drilling. Mexico has become a net importer of fuel, having to bring in $10 billion in product, which is really incredible. That has to stop, so it is committing $17 billion to drilling.

Exxon (XOM Quote) is moving its drilling budget up, too, according to reports today. Meanwhile, oil is in short supply, according to the inventory numbers.

The drilling that needs to be done is largely deepwater. There are only three really fabulous deepwater plays: National Oilwell Varco (NOV Quote), which builds them, GlobalSantaFe (GSF Quote) and Transocean (RIG Quote) to drill them. ...