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Gulf production struggles in hurricane aftermath MMS reports 54 platforms destroyed, 35 extensively damaged, 60 moderately damaged; some pipeline systems also crippled Ray Tyson For Petroleum News
U.S. Gulf of Mexico oil and gas production has been slow to recover from back-to-back hurricanes Ike and Gustav, which swept through the region more than a month ago. Meanwhile, offshore platform and pipeline damage reports continue to mount, with Ike blamed for most of the destruction.
The Gulf of Mexico normally averages 1.3 million barrels per day of oil, or 25 percent of U.S. domestic oil production, and 7-to-7.4 billion cubic feet of natural gas per day, or about 15 percent of domestic gas output.
Offshore operators, as of Thursday, Oct. 9, submitted reports to the U.S. Minerals Management Service indicating that 43.4 percent of U.S. Gulf oil production and 38.6 percent of the region’s gas production remained shut in. MMS has tracked production rates since offshore producers began evacuating platforms and drilling rigs in late August, just ahead of the Gustav, the first major storm to enter the U.S. Gulf in 2008.
MMS also reported that Ike destroyed 54 offshore production platforms, surpassing the 44 platforms destroyed by Katrina and approaching the 64 destroyed by Rita during the 2005 hurricane season. However, platforms destroyed by Ike produced a modest 13,300 barrels of oil per day and around 90 million cubic feet of gas per day.
Ike also caused extensive damage to another 35 platforms that could take from three to six months to repair, MMS said, noting that these include underwater structural damage or major damage to pipelines carrying the oil or natural gas to shore.
MMS said additional reports show that 60 platforms received moderate damage, taking one to three months before production can be restored. These include major topside damage to critical process equipment such as the platform’s compressor or damaged risers or flex joints where pipelines connect to the platforms, the agency added.
MMS said it confirmed a report of one jack-up drilling rig with extensive damage.
In addition to platform damage and destruction, an oil pipeline system and eight gas transmission pipeline systems also were reported damaged.
“Oil and gas operators and pipeline owners are testing and inspecting other pipeline systems to evaluate the full extent of any damage,” MMS said. “Considering the large impacted area, it will take some time to complete the inspections.”
No reports of oil spilled There have been no reports of oil released in the Gulf of Mexico federal waters impacting the shoreline or affecting birds and wildlife, MMS said.
Meanwhile, reduced production rates are expected to impact third and fourth quarter volumes and revenues of companies, especially E&P independents that operate in the U.S. Gulf.
Fourth quarter sales at issue Anadarko Petroleum, the largest producing independent in the U.S. Gulf, warned that while most of its operated deepwater platforms were operational, including the gas-rich Independence Hub, repairs to third-party downstream infrastructure “could significantly affect fourth-quarter sales volumes, as some production remains shut in or curtailed.”
Big E&P independent Devon Energy, which had restored about 60 percent of its U.S. Gulf production, said it cut third and fourth quarter production estimates due to damages and production curtailments caused by Ike, which toppled two of the company’s platforms in the Eugene Island area. For the third quarter, the company now expects to produce 59 million barrels of oil equivalent per day, down from its previous forecast of 61 million barrels. The lower estimate also reflects damages from typhoons in the South China Sea, Devon noted.
Halliburton, one the world’s largest oilfield service companies, said hurricanes Ike and Gustav hurt its operations in the U.S. Gulf and parts of Louisiana and Texas. Additionally, the storms interrupted manufacturing operations at Halliburton’s Houston plants and caused minor damage to its facilities along the Gulf Coast, the company said, adding that damage caused by the storms was expected to reduce third-quarter revenues and earnings by roughly $80 million.
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