Storm threat shuts some US Gulf oil output

Reuters, Sunday 24 Jun 2012

Oil producers evacuate workers, partly shut down production in Gulf of Mexico after US National Hurricane Center warns of tropical cyclone

Oil and gas producers increasingly shut down production and evacuated workers in the Gulf of Mexico on Saturday as the first weather system of the 2012 Atlantic hurricane season disrupted some operations in the prolific basin.

Anadarko Petroleum Corp shut in production at four of its eight Gulf platforms, including the Independence Hub, which can produce up to a billion cubic feet per day of natural gas.

"Once these facilities are securely shut in, we expect to remove all personnel from these facilitis today," the company said.

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

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

The US National Hurricane Center said Saturday afternoon that preliminary data indicated that a tropical storm may be forming about 250 miles (402 km) south-southeast of the mouth of the Mississippi River.

The system had a 90 per cent chance of developing into a tropical cyclone in a day or two, the hurricane center said.

"Tropical-storm force winds are already occurring in the eastern Gulf of Mexico," the hurricane center said.

Tropical cyclones become tropical storms when their winds exceed 39 mph (63 kph) and become hurricanes when their winds top 74 mph (119 kph). The Gulf system was expected to develop into Tropical Storm Debby.

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 BP Plc, Chevron Corp, Apache Corp and ConocoPhillips .

BP, the largest oil producer in the Gulf, operates seven platforms, including the world's largest, 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.

Anadarko is the largest gas producer in the basin, according to BSSE's sister agency, the US 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.

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