Quantcast

Oil firms take stock of Katrina damage

August 31, 2005

NEW YORK (Reuters) – Oil companies on Wednesday struggled
to assess if it would take days, weeks or months to recover
from Hurricane Katrina, as inspectors waded across flooded
refineries and helicopters passed over wounded drilling rigs.

In the aftermath of Katrina, 95 percent of U.S. oil and
natural gas production in the Gulf of Mexico and nine
refineries along the coast remained shut down.

Several crude pipelines on the Gulf Coast also remained out
of service due to power outages, damage and flooding, creating
further headaches for an industry that had already been badly
strained by the storm.

What’s more, the Energy Department said Port Fourchon in
Louisiana, which handles a large share of U.S. crude oil and
natural gas imports, was severely damaged by Hurricane Katrina
and was cut off by floodwaters.

Several oil companies said damage to their offshore
operations was not as extensive as they feared, although few
were willing to offer an estimate as to when production would
return to normal.

Murphy Oil Corp. said Wednesday its two Gulf of Mexico oil
production facilities escaped serious damage, including one of
which fell under the eye of the hurricane. Hurricane Katrina
has shut down 80,000 barrels per day (bpd) of its crude and gas
output, the company said.

Exxon Mobil Corp. also said crews were running assessments
of its offshore oil and gas production facilities in the Gulf
of Mexico. It said damage to the majority of its offshore
structures was limited, but 45,000 bpd of oil and 760 million
cubic feet per day of natural gas were shut down.

Neither Murphy nor Exxon Mobil would comment on how long it
would take to return to full production.

BP Plc also declined say when it would return to full
production, adding that a “significant” amount remained closed
down.

It said inspections so far showed no significant damage to
its massive deepwater facilities. However, seven oil platforms
have toppled and two platforms are leaning in the shallow
waters of the Gulf of Mexico.

At Anadarko Petroleum Corp.’s Marco Polo deepwater platform
in the Gulf of Mexico, staffers have boarded and are conducting
damage assessments.

Chevron Corp. has conducted some inspections with
helicopter crews, but said it may not have a public statement
on its damage for several days.

Another oil company, Kerr McGee, reported it was producing
roughly 55,000 barrels of oil equivalent per day from its
operations in the western Gulf of Mexico and plans to increase
output as “pipelines allow.”

In all, about 1.4 million bpd of crude production — about
7 percent of domestic demand — was down, and concerns about
the lack of feedstock for refineries prompted the United States
to offer to loan crude from its Strategic Petroleum Reserve to
companies to replace lost output.

The offer helped ease oil prices from record highs above
$70 per barrel, but U.S. crude still remained at a red-hot
$69.70 a barrel. That was down just 11 cents from Tuesday’s
sharply higher finish when record peaks were set by crude,
gasoline and heating oil futures.

Nine refineries with combined capacity of nearly 2 million
bpd were shut down and four more were running at reduced rates.
Three of the refineries in Louisiana were “under water,”
according to a U.S. senator.

Exxon Mobil said that restoring products pipeline and
marine links, including Mississippi River traffic, was more
important to it in boosting crude runs at its capacity-curbed
Baton Rouge, Louisiana, refinery.

The company still had no word on the condition of the
Chalmette Refinery LLC facility.




comments powered by Disqus