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Katrina destroys 37 offshore platforms Hurricane takes out four drilling rigs in U.S. Gulf of Mexico; 60 percent of oil, 40 percent of gas production remains shut-in Ray Tyson Petroleum News Correspondent
Nearly two weeks after Hurricane Katrina swept through the region causing a major supply disruption, Gulf of Mexico producers were still assessing damage to offshore facilities while slowly restarting oil and gas production shut-in ahead of the massive storm.
The U.S. Minerals Management Service said 60.12 percent or 901,726 barrels of Gulf oil production per day remained shut-in and that 40.2 percent or 4.02 billion cubic feet of natural gas production remained shut-in as of Sept. 8.
That could rank Katrina among the more disruptive storms to hit Gulf producing areas in recent memory, perhaps even more disruptive than last year’s hurricane menace, Ivan.
In fact, some analysts now predict that the total amount of Gulf production shut-in or deferred because of Katrina will surpass Ivan’s 44.5 million barrels of oil and 173 billion cubic feet of natural gas. Thus far, with more than half Gulf production still shut-in, Katrina’s total comes to 14.56 million barrels of oil and 75.76 billion cubic feet of gas.
“Let me remind everyone in the room that Katrina was a worse hurricane than Ivan,” James Day, chief executive officer of contract drilling company Noble, told analysts Sept. 6 at the annual Lehman Brothers energy conference.
One of Noble’s rigs drifted 18 miles off location and will be out of commission for a month, Day said. However, he said Katrina caused only “minimal” damage to the rig.
“We are very, very fortunate among the drillers in not having any substantive problems with our units,” Day said. Rowan loses one jack-up rig Katrina destroyed at least four offshore drilling rigs, including one owned by contract driller Rowan. The capsized wreckage of the Rowan-New Orleans, a LeTourneau 52-class slot jack-up rig, was located in 155 feet of water in Main Pass Block 185 offshore Louisiana, the company said Sept. 7. Rowan plans to salvage the wreckage.
“Damage to Rowan’s other rigs resulting from Hurricane Katrina appears to be minimal,” the company said.
The U.S. Minerals Management Service said that of the roughly 4,000 production facilities in the Gulf, 37 shallow water platforms on the continental shelf accounting for only 1 percent of Gulf production were destroyed by the hurricane. Deepwater platforms extensively damaged Additionally, four large deepwater platforms accounting for about 10 percent of pre-storm oil production in the Gulf suffered extensive damage, which MMS said could take three to six months to bring back on line.
Moreover, “some” sub-sea pipelines suffered damage during the storm that could take months to repair, MMS said, adding that other pipelines have been inspected, tested and brought on stream.
“Our focus now is to ensure that the offshore oil and gas operations are brought on-line safely and as soon as possible,” Rebecca Watson, assistant secretary for Land and Minerals Management, told the U.S. Senate Energy and Natural Resources Committee on Sept. 6.
Watson testified that while Katrina moved through a core area of the Gulf causing damage to production and exploration facilities, early reports indicated “that the vast majority of facilities could be ready to come back on line in days and weeks, rather than months.”
She added: “Despite the damage, about 90 percent of Gulf production could return to the market in one month, if refineries, processing plants, pipelines and other onshore infrastructure are in operation …”
Meanwhile, offshore producers and drillers are beginning to provide damage and production updates on their operations in the Gulf. Dike protects Chevron Mississippi refinery Chevron, a major producer and refiner in the Gulf region, said the company returned to 45 percent of its pre-Katrina production level a week after the storm hit. “We are continuing to work safely to bring more production online as soon as possible,” Chevron chief executive Dave O’Reilly said.
Chevron said aerial reconnaissance and more detailed onsite inspections indicated the company’s major deepwater oil and gas production facilities in the Gulf did not sustain significant damage. Genesis and Typhoon are currently producing, while Petronius was ready to produce once damage assessment of associated pipelines was complete, Chevron said.
Aerial reconnaissance also indicated most of Chevron’s oil and gas production facilities on the Gulf’s continental shelf were not significantly damaged, the company said, adding that it was working to bring more production on line. However, “a handful” of offshore facilities apparently incurred some damage, the company said.
Chevron said initial inspection of its huge Pascagoula refinery in Mississippi showed that a dike built following Hurricane George in 1998 was successful in preventing catastrophic damage by Katrina. The breached section of the dike was expected to be repaired soon, “but it will be days before a full estimate of damage is known or when operations can be safely brought back online,” the company said.
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