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Tropical storm threat shuts some US Gulf oil output

Date: 26-Jun-12
Country: USA
Author: Kristen Hays

Oil and gas producers ramped up production shutdowns and evacuated workers in the Gulf of Mexico on Saturday as Tropical Storm Debby became the first named storm of the 2012 Atlantic hurricane season to disrupt operations in the prolific basin.

BP Plc said late on Saturday that it had issued instructions to shut down oil and gas production at its seven platforms in the Gulf and stepped up worker evacuations as weather conditions worsened.

"Those unable to evacuate will shelter in place for the tropical storm," BP said. Workers were securing wells that were being drilled in addition to shutting down oil and gas output.

Anadarko Petroleum Corp had already shut down production and evacuated workers at four of its eight Gulf platforms by the time Debby strengthened into a named storm, including the Independence Hub, which can produce up to a billion cubic feet of natural gas a day.

Debby was centered about 220 miles south-southeast of the mouth of the Mississippi River and was moving slowly north, according to the National Hurricane Center.

Some models showed the storm moving toward Florida, but most forecasters agreed Debby was more likely to turn west toward the Texas coast, moving across areas directly south of Louisiana that are home to the bulk of the Gulf's oil and gas infrastructure.

Those clusters of installations include BP's platforms. Among those seven structures is the world's largest deepwater platform, Thunder Horse, which is designed to produce up to 250,000 barrels per day of oil and 200 million cubic feet per day of natural gas.

The company had been evacuating workers not essential to production, but "the strength and current track of the storm" prompted further evacuations and production shutdowns, BP said.

The Hurricane Center said Debby was "not expected to move much during the next couple of days."

It projected that if Debby stayed on that westerly path, it could come ashore late next week anywhere along the Texas coast, a major refining hub that is home to a quarter of the nation's refining capacity.

Forecasters noted that one model showed faster movement, "so it is possible that Debby could reach the coast earlier than indicated."

On Saturday afternoon the storm had maximum winds of 50 miles per hour, forecasters said. Tropical storm winds range from 39 to 73 miles per hour (63 to 117 km per hour).

The US Bureau of Safety and Environmental Enforcement, which oversees oil and gas activity in the Gulf, said earlier on Saturday that a fraction of the basin's output was shut in: 7.8 percent of daily oil and 8.16 percent of daily natural gas output.

The agency's next update will be released at midday on Sunday.

The Gulf accounts for about 20 percent of U.S. oil production and 6 percent of natural gas output.

BHP Billiton fully evacuated workers and shut in production at its pair of Gulf platforms on Friday.

On Saturday, other producers monitored the system and maintained production while non-essential workers, or those not directly involved in production, such as cooks and cleaning staff, were evacuated.

The Louisiana Offshore Oil Port, the only US port capable of offloading foreign crude from giant tankers, said operations were normal on Saturday. "We continue to offload tankers and are making deliveries to shippers from our onshore storage facilities," spokeswoman Barb Hesterman said.

Anadarko's four affected platforms - Independence Hub, Marco Polo, Constitution and Neptune - have a combined capacity to produce up to 204,000 bpd of oil and 1.5 billion cubic feet per day of gas.

BHP's Shenzi and Neptune platforms can produce up to 170,000 bpd of oil and 100 million cubic feet per day of gas.

The producers that maintained output included Chevron Corp, Apache Corp and ConocoPhillips.

BP is the largest oil producer in the basin, while Anadarko is its largest gas producer, according to BSSE's sister agency, the U.S. Bureau of Ocean Energy Management.

Energy markets traditionally keep a close eye on storms passing through the region for output disruptions and possible supply squeezes.

The risk to markets because of Gulf storms has diminished slightly in recent years as the increased development of shale deposits fueled a boom in onshore oil and gas production.

(Editing by Paul Simao)

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