On October 9, around 40 percent of daily crude oil production took a massive hit in the offshore U.S. Gulf of Mexico wells due platform evacuations and shut-ins ahead of Hurricane Michael.
Personnel evacuated
The oil producers, Anadarko Petroleum Corp, BHP Billiton, BP, and Chevron Corp have evacuated personnel from 75 platforms ahead of the storm. On October 10, the storm is expected to make its way through the central Gulf and make landfall on the Florida Panhandle.
Operations halted
On October 9, the country’s largest privately owned crude terminal, the Louisiana Offshore Oil Port LLC, halted operations at its marine terminal. The facility is the only port in the United States capable of fully loading and unloading tankers with a capacity of 2 million barrels of oil.
According to offshore regulator the Bureau of Safety and Environmental Enforcement (BSEE), the companies have turned off their daily production of about 670,800 barrels of oil and 726 million cubic feet of natural gas by midday on Tuesday. The evacuations affected about 11 percent of the occupied platforms in the Gulf.
Shutdown to affect prices
According to data from the Energy Information Administration, U.S. crude futures settled up less than 1 percent at $74.96 per barrel, reflecting the declining importance of the Gulf of Mexico in output because of the growth of production from the nation’s onshore shale fields. The crude output lost in the two days of storm shut-ins represents about 9 percent of the U.S. production of 11.1 million barrels per day.
Additionally, oil producers have also halted most offshore drilling operations by evacuating three drilling rigs and moving eight others out of the storm area.
Ports closed
The U.S. Coast Guard closed the ports of Panama City and Pensacola, Florida, and the Gulf Intracoastal Waterway east of Perdido Pass to vessel traffic, citing expectations for gale force winds within 12 hours.
State of Alabama’s Mobile port, spokeswoman Sheri Collins said, “Other ports further west were still operating normally. However, operations including railcar loadings will cease at 5 p.m. Pilots who bring vessels into the port’s ship channel halted transport due to rough seas and will resume after the storm passes”.
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Source: Reuters
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