Hurricane Season: GoM shut ins, export issues : Some oil, gas production halted as US Gulf Coast prepares for major storm

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Some oil, gas production halted as US Gulf Coast prepares for major storm


US offshore oil and gas drillers started shutting production Wednesday as a tropical storm develops in the northern Gulf of Mexico.



The US Department of Interior's Bureau of Safety and Environmental Enforcement said Wednesday that Gulf of Mexico drillers had shuttered 32% of oil production and 18% of natural gas output ahead of storm.

The weather system has a 100% chance of developing into a tropical depression within 48 hours, the National Hurricane Center said. Forecasters expect it to reach tropical storm strength Thursday evening and increase to hurricane strength by Saturday morning, with landfall near the Texas-Louisiana border.

**Major refiners sit in the storm's projected path in the Houston area and southeast Louisiana. Plants are monitoring the storm and taking precautions ahead of potential storm surge, rain and wind.

**The storm could slow US oil and LNG exports if terminals and shipping operations are interrupted.

**The US exports more than three times as much crude oil and LNG as it did when Hurricane Harvey hit the Houston area in August 2017. The storm did massive damage across the energy and shipping sectors, roiling markets for weeks.

**Offshore Gulf of Mexico production was estimated at 2.91 million b/d of oil and 1.81 Bcf/d in June, according to the Energy Information Administration.

**Crude oil futures were trading sharply higher Wednesday morning on a larger-than-expected US stock draw. At 1455 GMT, NYMEX August WTI was up $1.76 at $59.59/b and ICE September Brent was $1.93 higher at $66.09/b.

**US Gulf Coast sour crude benchmark Mars continued to strengthen Wednesday, a day after jumping 80 cents/b as oil and natural gas producers brace for a developing tropical storm.

**US offshore drillers have shut-in 602,715 b/d of oil production and 496 MMcf/d of natural gas output according to Bureau of Safety and Environmental Enforcement data based on company surveys.

**BSEE said 15 platforms and four non-dynamically-positioned rigs have been evacuated, and three dynamically-positioned rigs have been moved off site.

**Chevron, Anadarko and BP have started shutting in Gulf of Mexico production and evacuating staff from drilling platforms.

**Chevron is shutting production at its Big Foot, Blind Faith, Genesis, Petronius and Tahiti platforms. Production continues at its Jack St. Malo deepwater project.

**Anadarko is shutting production at its Constitution, Heidelberg, Holstein and Marco Polo platforms in the central Gulf of Mexico.

**Shell has started evacuating non-essential staff, but is continuing production. Shell has slowed production at its Olympus project by 1,835 b/d and at its Mars project by 700 b/d.

**Energy utilities in the path of a storm have placed their crews and contractors "on alert and ready to safely restore service to customers as quickly as possible," according to an Entergy Texas media notice.

**Refiners with operations along the Louisiana, Mississippi and Texas coasts are monitoring the storm, concerned that heavy rainfall combined with storm surges could cause flooding at their facilities.



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