U.S. Gulf production still languishing

Nearly two months after operators began evacuating offshore platforms and drilling rigs ahead of back-to-back hurricanes Gustav and Ike more than 30 percent of oil and gas production remained shut-in in the Gulf of Mexico, according to the latest statistics issued Thursday, Oct. 23, by the U.S. Minerals Management Service.

From the operators’ reports, MMS estimates that 32.3 percent of the oil production and 34.5 percent of the natural gas production in the U.S. Gulf remained shut-in.

The Gulf normally averages about 1.3 million barrels of oil per day, or 25 percent of U.S. domestic oil production, and between 7 billion and 7.4 billion cubic feet of natural gas per day, or about 15 percent of domestic gas output.

The official MMS damage report, now more than two weeks old, stands at 54 platforms destroyed; 35 platforms seriously damaged and taking from three to six months to repair; and 60 platforms receiving moderate damage and taking one to three months before production can be restored. Additionally, an oil pipeline system and eight gas transmission pipeline systems were reported damaged.

Meanwhile, the American Petroleum Institute reported that total petroleum deliveries for the 2008 third quarter fell 5.2 percent from third-quarter 2007, the result of hurricane-related production disruptions in the U.S. Gulf. API also reported that about 4 million barrels per day of U.S. refinery capacity were affected. Gasoline deliveries fell 4 percent, distillate deliveries dropped 7.4 percent, and jet fuel deliveries slipped 2.7 percent.

Ike and Gustav also hindered the delivery of foreign crude oil to Gulf Coast ports. Crude oil imports in September reportedly fell nearly 13 percent to less than 9 million barrels per day compared with September 2007, sinking to their lowest level in more than five years. The federal government delivered close to 5 million barrels from the federal Strategic Petroleum Reserve to a number of refiners seeking replacement crude oil supplies.

“Hurricanes Gustav and Ike hurled some significant challenges at the industry this past month,” an API representative said.

—Ray Tyson