UPDATE 1-US Gulf oil output still only 72 pct after Ivan
Tue Oct 12, 2004 04:14 PM ET
NEW YORK, Oct 12 (Reuters) - U.S. oil production in the Gulf of Mexico is still running at only 72 percent of its normal rate of 1.7 million barrels per day after pipeline damage by Hurricane Ivan, the U.S. Minerals Management Service said on Tuesday.
Some 471,000 bpd of oil and 1.7 billion cubic feet per day of natural gas production was still out, MMS said. Gas production was at 86 percent of its normal 12.3 bcfd.
About 150,000 bpd of oil production should be restored by the end of the month, but the remaining output could take up to six months to restore, an MMS spokeswoman said on Tuesday.
A total of 18.9 million barrels of oil and 90.1 billion cubic feet of gas has been shut since mid-September when Ivan damaged pipelines and platforms. The gulf is home to 25 percent of U.S. oil and gas output.
Stormy weather in the gulf and the entanglement of crude and natural gas lines in the shallow water section of the gulf have led to delays in fixing the pipelines.
TANKERS TO THE RESCUE?
"Our pipeline is crossed by Shell's (RD.AS: Quote, Profile, Research) (SHEL.L: Quote, Profile, Research) Na Kika line, which has to be lifted out of the water to fix, then ours has to be lifted out of the water," Ayana McIntosh-Lee, a spokeswoman for British oil company BP (BP.L: Quote, Profile, Research) (BP.N: Quote, Profile, Research) , said about the company's 50,000 bpd MPOG crude line.
To get around the damaged pipelines, some companies may seek to use tankers to "allow offloading of production from a platform to a large tanker and then further offload the production into a shuttle tanker to take to delivery points onshore," MMS said in a statement.
That could be an option for BP, which has fixed damage to platforms but is unable to send the oil and gas to land because of pipeline damage, said McIntosh-Lee. BP has not yet decided whether using tankers would be the best solution.
Tanker freight rates are high, which could add to expense, but "there will always be a ship at some price," said Jeff Goetz of ship brokers Poten and Partners.
Below is a list of pipelines damaged by Hurricane Ivan, as provided by MMS.
--- LARGE PIPELINES DAMAGED IN FEDERAL WATERS ---
(10-inch diameter or bigger) Operator Map Block Diameter Product
Area No. Equilon MC 474 18 Oil Status: Shut in BP Pipeline MP 225 18 Oil Status: Shut in Chevron USA GI 37 10 Oil Status: Shut in Chevron PL SP 49 10 Gas/Oil Status: Shut in Taylor Energy MC 21 10 Oil Status: Shut in Tennessee Gas SP 77 26 Gas Status: Shut in Southern MP 293 24 Gas Status: Shut in Southern MP 289 24 Gas Status: Shut in Southern MP 306 18 Gas Status: Shut in Williams MC 20 12 Gas Status: Shut in Tennessee Gas SS 144 36 Gas Status: Recently back on line Tennessee Gas SS 198 26 Gas Status: Recently back on line |
