Oil companies idle production as US Gulf Coast braces for Tropical Storm Sally

Reuters , Sunday 13 Sep 2020

Energy producers and communities along the U.S. Gulf Coast organized evacuations of residents and offshore workers on Sunday as they prepared for the second hurricane strike in less than a month.

Royal Dutch Shell Plc began shutting some of its offshore drilling operations on Sunday in preparation for Tropical Storm Sally, forecast to become a hurricane before making landfall on Tuesday, the company said.

Shell's offshore production was unchanged and all personnel remained on production platforms, company spokeswoman Cynthia Babski said.

However, one firm, BHP does not plan to take workers from offshore facilities, a company spokeswoman said on Sunday.

Independent refiner Phillips 66 was monitoring the storm on Sunday, the company said. Its 255,600 barrel-per-day (bpd) refinery is close to the forecast path of Sally across southeast Louisiana.

Tropical Storm Sally strengthened as it crept up the warm waters of the U.S. Gulf of Mexico on Sunday, carrying winds that could reach 90 miles per hour (145 kph) ahead of landfall on Tuesday, forecasters said.

It was about 280 miles (450 km) east-southeast from the mouth of the Mississippi River and moving at 13 mph, according to the U.S. National Hurricane Center. At 11 a.m. EDT (1500 GMT), its sustained winds had increased to 60 mph (95 kph), the NHC said.

Chevron Corp. and Murphy Oil Corp on Saturday began evacuations from offshore production platforms, spokespeople said. Chevron's Pascagoula, Mississippi, refinery was implementing storm preparedness procedures, the company said.

Other oil producers with drilling rigs and platforms in the area said they were monitoring the storm and prepared to take action as needed.

U.S. Gulf of Mexico offshore oil production provides about 17% of U.S. crude oil and 5% of U.S. natural gas production. As much as 1.5 million barrels per day of oil output was shut last month as Hurricane Laura tore through the Gulf of Mexico.

Louisiana on Saturday declared a state of emergency and the city of New Orleans ordered a Sunday 6 p.m. CDT evacuation for residents outside the city's protective levees. Coastal Grand Isle also issued its third evacuation since July.

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