Gulf Companies Brace for Hurricane Dean

Monday, August 20, 2007
Oil and natural gas producers were evacuating offshore workers and shutting small amounts of production over the weekend as they watched powerful Hurricane Dean storm across the Caribbean Sea toward an entry into the Gulf next week.

Forecasts and computer models point Dean away from the paths taken by 2005's devastating hurricanes Katrina and Rita through offshore oil production areas and onshore refining centers. Taking a lesson from Katrina, which defied forecasts showing it would confine its damage to Florida, companies with operations from the central to western Gulf continued pulling support workers who were not essential to keeping offshore production running.

The U.S. Minerals Management Service said that 10,300 barrels per day out of 1.3 million barrels in Gulf of Mexico oil production was shut in due to the threat of Hurricane Dean. About 16 million cubic feet out of 7.7 billion cubic feet of daily natural gas output in the Gulf of Mexico has been shut, said the agency, which oversees offshore energy production. So far, one production platform and two drilling rigs have been evacuated due to the storm. Oil majors Exxon Mobil, Shell Oil and ConocoPhillips said they were evacuating workers on Saturday. Exxon said production was not cut on Saturday as it pulled non-essential workers from the Gulf. Shell said 300 more support workers were being taken from the Gulf Saturday.

Shell has shut in daily production of 10,000 barrels of oil and 15 million cubic feet of natural gas, the company said. ConocoPhillips was evacuating non-essential workers from the Magnolia platform on Saturday ahead of a possible shutdown on Monday, the company said in a statement. Offshore production and well operations were unaffected by the evacuations, Conoco said.

Conoco did not expect Dean to affect onshore production in southeast Louisiana. The Magnolia platform is about 165 miles south of the central Louisiana coast and can handle 50,000 barrels per day in oil and 150,000 cubic feet of daily natural gas output. Leading driller Transocean said staff on its drilling rigs had been reduced by about 360 people in the last two days. Two of the company's rigs in the western Gulf were to be evacuated by Monday, Transocean said. BP planned to take workers from offshore platforms throughout the weekend, the company said on Friday. Murphy Oil also said on Friday workers were being evacuated. Non-essential workers are taken first to ensure there is room for workers essential to production aboard helicopters flying from the U.S. coast when it becomes necessary to close to valves so the wells stop producing. Source: Reuters

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