Oil, Natural Gas Evacuations Start as Gustav Advances (Update3)
By Aaron Clark and Margot Habiby
Aug. 27 (Bloomberg) -- U.S. oil and natural-gas companies have begun evacuating thousands of offshore workers in the Gulf of Mexico as Tropical Storm Gustav, which may become the costliest hurricane since Katrina, heads toward the region.
``We could see 50 percent of Gulf of Mexico oil and gas production shut in,'' said Andy Lipow, president of Lipow Oil Associates in Houston.
Royal Dutch Shell Plc said it will evacuate about 300 non- essential workers today from its offshore operations. The evacuation will have no immediate impact on production, Shell said in an announcement on its Web site.
``Several thousand'' of the almost 20,000 workers on offshore platforms, about one-quarter of whom are needed to maintain production, will be evacuated today, Ted Falgout, director of Port Fourchon in Louisiana, said in an interview. The port is a staging area for offshore workers.
Energy prices rose as the storm was forecast to regain hurricane strength as it moves on a track toward Louisiana and the offshore fields responsible for about a quarter of U.S. oil production and 15 percent of gas output.
The storm packed sustained winds of almost 60 miles (95 kilometers) per hour and was about 90 miles (145 kilometers) south-southeast of Guantanamo, Cuba, just before 2 p.m. New York time, the U.S. National Hurricane Center said in an advisory. Gustav may reintensify into a hurricane tomorrow or Aug. 29.
Storm Track
The Hurricane Center's five-day forecast track shows Gustav crossing western Cuba and heading up toward Louisiana or Missisippi on Sept. 1.
Gustav may become a ``destructive hurricane rivaling Rita and Katrina in effect on energy,'' Joe Bastardi of AccuWeather.com in State College, Pennsylvania, said in an outlook today. ``Tracks of storms of this genre include the worst hits on Galveston and Gustav has a chance to join that list.''
Hurricane Katrina, the costliest storm ever to hit the U.S., with damage estimated at $81 billion, struck in August 2005.
Crude oil for October delivery increased $1.88, or 1.6 percent, to $118.15 a barrel on the New York Mercantile Exchange. Prices are up 64 percent from a year ago.
Natural gas for September delivery rose 11.6 cents, or 1.4 percent, to $8.394 per million British thermal units in New York.
Evacuations
Shell, the biggest European oil company, said its evacuations will have no immediate impact on production.
BP Plc, Europe's second-biggest oil company is evacuating some non-essential workers. Production hasn't been affected, the company said in a recorded message.
Transocean Inc., the world's largest offshore oil driller, is pulling up and securing undersea equipment. The company, which has 1,550 workers on 11 rigs in the Gulf, has evacuated 30 non- essential personnel from three rigs.
Diamond Offshore Drilling Inc., the world's second-largest deepwater oil driller by market value, said it was beginning to secure wells in preparation for the storm and had made no evacuations.
Noble Corp., the third-largest U.S. offshore oil driller, began evacuating non-essential staff and will suspend operations at all eight of its rigs in the Gulf of Mexico.
Exxon Mobil Corp.'s offshore production was normal and evacuations haven't started, the company said on its Web site.
Nexen Inc., the Canadian producer that owns fields in the Gulf of Mexico, said it began removing some workers from oil and gas platforms.
Anadarko
Anadarko Petroleum Corp., the second-largest independent oil producer, ``was preparing to begin evacuating non-essential workers'' at noon Houston time, according to the company's Web site. Anadarko hasn't shut in any of its more than 150,000 barrels a day of oil equivalent output from the Gulf. It has about 600 workers in the Gulf.
ConocoPhillips, which evacuated its sole Gulf platform, Magnolia, ahead of an unnamed storm last September, is monitoring Gustav, spokesman Charlie Rowton said today in an interview. Magnolia had daily output equivalent to about 33,000 barrels of oil in 2006.
There are 37 rigs drilling in water at least 1,700 feet (518 meters) deep in the Gulf of Mexico this week, according to the Interior Department's Minerals Management Service. Some rigs are equipped to sail out of the way when storms approach.
Exxon, Anadarko, Devon Energy Corp., BHP Billiton Ltd., Murphy Oil Corp. and Plains Exploration & Production Co. began new deepwater drilling projects this week, the service said.
Tankers
The Louisiana Offshore Oil Port, the nation's biggest oil import terminal, is operating normally, said Barb Hestermann, a spokeswoman for the port. ``It will probably be several days before we make an announcement,'' Hestermann said.
The port, located about 20 miles off the Louisiana coast, has the capacity to receive 1.1 million to 1.2 million barrels of oil a day. The port also handles some domestic offshore production.
Tanker rates for oil shipments from the Caribbean to ports along the Gulf of Mexico have risen 32 percent on speculation Gustav will delay shipping, according to ship brokers Lone Star, R.S. Platou, based in Houston, and Poten & Partners in New York.
Petroleos de Mexicanos, Mexico's state-owned oil company, isn't currently planning any evacuations or shut-ins, as the storm may miss Mexican facilities, spokesman Javier Delgado said.
To contact the reporter on this story: Aaron Clark in New York at aclark27@bloomberg.net; Margot Habiby in Dallas at mhabiby@bloomberg.net.
bloomberg.com |
