MMS, operators take stock after Ike

Hurricane destroys at least 28 platforms in Gulf of Mexico, others severely damaged; more reports of devastation expected

Ray Tyson

For Petroleum News

Reported damage to Gulf of Mexico oil and gas facilities is mounting in the wake of Hurricane Ike, while government authorities try to figure out how long before the region’s production can be restored to pre-hurricane levels.

“We expect additional reports of damage as weather allows more flights out to these areas and the operators are able to board the platforms to begin inspection,” Lars Herbst, Gulf regional director for the U.S. Minerals Management Service (MMS), told reporters in a Sept. 16 teleconference.

At midweek, 28 production platforms were reported destroyed and several others severely damaged, including the BP-operated Mad Dog production spar which reportedly lost its drilling rig. “We are counting Mad Dog as a platform rig destroyed,” Herbst said.

Chevron said reconnaissance flights indicated that some of its platforms were affected by the storm, “with several reported as toppled in the eastern and western shelf areas.”

Herbst said most of the facilities reported destroyed by Ike were older, lower-producing platforms located in deeper portions of the relatively shallow waters of the U.S. Gulf’s continental shelf. “This is indicative of waves 40 to 50 feet hitting the production decks,” he noted.

Additional damage reported included three jack-up drilling rigs destroyed and one jack-up drilling rig with extensive damage. In a separate matter, two drilling rigs that had been reported drifting on Sept. 3 had been secured by tugs, MMS said, adding that early reports also indicated some pipeline damage. “For pipelines, those always take longer to assess the damage,” Herbst said.

Platforms reported destroyed by Ike produced a total of 11,000 barrels of oil per day and 82 million cubic feet of gas per day. The U.S. Gulf normally produces around 1.3 million barrels of oil per day and about 7 billion cubic feet of gas per day.

Still, as of Sept. 18, MMS reported that 93 percent of the total oil and about 78 percent of the total natural gas produced in the U.S. Gulf remained shut-in. However, the one-two punch of Ike and earlier Gustav has kept on average roughly 80 percent of the oil and 65 percent of the gas out of circulation for the past three weeks.

The Gulf of Mexico provides 25 percent of America’s oil production and 15 percent of its natural gas production.

“It’s probably a little too early to make that assessment, as far as the total length of time to get all or essentially all of the production back online,” Herbst said.

Damage may be widespread

It took months to restore production after hurricanes Katrina and Rita, both devastating Category 5 storms when they passed through producing areas of the U.S. Gulf in 2005.

“Hurricane Ike, while a Category 2 hurricane, was a large storm,” Herbst said, noting that of the 3,800 oil and gas facilities in the U.S. Gulf, 1,450 were exposed to hurricane winds greater than 74 miles per hour. An estimated 12,200 miles of pipeline also were in Ike’s path, he added.

The 28 platforms thus far reported destroyed by Ike compare to 44 destroyed by Katrina and 64 by Rita. However, the main difference is that the storms of two years ago appear to have taken a heavier toll on deepwater facilities, which account for 70 percent of all oil produced in the U.S. Gulf.

However, Herbst cautioned that preliminary inspections had not yet been conducted on the more westerly portion of the U.S Gulf, including offshore Texas. For one, he said helicopter flyovers had been limited due to fuel shortages created by Ike.

“We just do not have confirmation at this time, either from our aircraft that are in the area, or from operator over-flights,” Herbst said.

He said once most of the damage assessments are in, MMS would then begin “transitioning” to the next phase – looking for ways to resume production, including barging oil ashore and re-routing stranded product through undamaged pipeline systems.

Operators resume production

Anadarko Petroleum said it was repairing minor surface damage on its deepwater Constitution, Marco Polo, Gunnison, Nansen, and Boomvang platforms and that it had resumed production from its “ultra-deepwater” Independence Hub platform, the largest single source of natural gas in the U.S. Gulf, and added that its Neptune platform was ready to resume production as pipelines allowed.

Shell Oil, the U.S. Gulf’s largest producer with over 130,000 barrels per day of capacity, said it restarted some 26,000 barrels of oil equivalent per day and that it expected the bulk of its remaining production in the East Gulf to start up late this weekend and into mid-next week.

In another sign of recovery, the Louisiana Offshore Oil Port, the only U.S. deepwater crude oil port, said it was running at full rates and meeting all customer requests for crude while offloading tankers. Waterways to refineries from New Orleans to Houston were reopening, though some with restrictions, while navigational aids were being restored and debris cleared.