By Ayesha Rascoe

WASHINGTON (Reuters) - The Obama administrationwas set to release its latest set of requirements for offshoreoil drillers by Thursday as the government moves toward liftingits contested ban on deepwater drilling in the Gulf of Mexico.

The Interior Department has said it will release newdrilling regulations by the end of September aimed atincreasing safety in the industry, which was rocked by the BP oil spill disaster.

The new rules are one of the conditions the department saidmust be in place before it lifts its temporary ban onexploratory drilling in waters more than 500 feetdeep. The freeze is supposed to expire in Nov. 30, but theInterior Department has said it hopes to end the ban early.

These new rules will likely encompass many of therecommendations made in the safety report the departmentreleased in May, such as requirements for certifying that rigshave working blowout preventers and standards for cementingwells.

The rules may also include requirements for more vigoroustesting of equipment and for blowout preventers to have atleast two sets of blind shear rams, which are supposed to shuta well in the event of a blowout.

Imposed as BP's ruptured undersea well poured millions ofbarrels of oil into the Gulf of Mexico, the drilling moratoriumalready has forced oil companies to postpone projects and willcut into gulf oil output next year.

Once the ban is lifted, drilling is still unlikely toresume quickly, Interior official Michael Bromwich said thisweek.

"Even when the moratorium is lifted, you're not going tosee drilling going on the next day, or even the next week,"Bromwich told a White House oil spill commission meeting. "It'sgoing to take some time."

Erik Milito of the American Petroleum Institute, anindustry group, said oil companies were ready to meet morestringent safety regulations, but the government must approvenew permits expeditiously.

"It's going to take a commitment of resources from thegovernment to allow the industry to get back to work," Militosaid on a conference call with reporters.

Shallow drillers have faced significant delays in gettingpermits since the BP accident, even though the drilling bandoes not apply to waters less than 500 feet deep.

Last year the department approved 15 shallow water permitsfor new wells between June and August. Over the same periodthis year, the department approved four.

The moratorium is officially forecast to cut an average of82,000 barrels per day in oil output from the gulf in 2011,according to the Energy Information Administration.

Extended delays would likely push output down further,since that estimate is based on the assumption that drillingwill immediately resume at a normal pace after the moratorium. (Editing by Walter Bagley)