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Chevron Evacuates Workers in Western Australia as Cyclone Nears

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PERTH - Chevron Corp. has begun evacuating workers from some of its oil and natural gas operations in Western Australia state as Tropical Cyclone Rusty threatens to unleash high winds and flooding in the Pilbara region over coming days.

Chevron is moving non-essential workers on Barrow and Thevenard Islands as a precautionary measure, and tying down equipment ahead of the cyclone's arrival, the U.S. company said in a statement Tuesday.

Chevron operates oil facilities on the two islands, while Barrow Island is also the site of its 52 billion Australian dollar ($53.4 billion) Gorgon gas-export project, which is under construction and around 55% complete.

Workers have also been evacuated from the Atwood Osprey drilling rig, and Chevron said it is continuing to monitor the situation closely.

Woodside Petroleum Ltd., operator of the North West Shelf and Pluto gas-export facilities at Karratha, separately said it is taking precautions to "safeguard our people and assets" without being more specific.

Australia's three biggest iron ore ports are readying for the tidal surges, destructive winds and heavy rainfall predicted as Rusty heads towards land in the next day or so. Port Hedland, Cape Lambert and Dampier ports were closed Monday due to rough seas ahead of the storm.

Fortescue Metals Group Ltd. said its port and rail operations at Port Hedland have been locked down in accordance with cyclone readiness procedures.

"All work has been suspended on site," the Perth-based company said in an email.

Atlas Iron Ltd. said it has stopped work at its flagship Pardoo mining operations located about 75 kilometers east of Port Hedland.

"It is very much bearing down on us," managing director Ken Brinsden said of the cyclone on a conference call with investors. "It is looking almost like a direct hit on the Pardoo site."

He said Atlas didn't expect the temporary shutdown to affect the company's full-year guidance. Atlas Iron is targeting shipments of between 7.4-7.7 million metric tons of iron ore this fiscal year.

"There will be an impact, clearly, but we would expect to get back in pretty quickly," Mr. Brinsden said.

Rusty is expected to move close to the Pilbara coastline Wednesday and may intensify into a Category 4 system, Australia's second-most severe cyclone ranking that assumes very destructive winds and structural damage.

Australia's Bureau of Meteorology has also warned of flooding in some areas, along with a dangerous storm tide as the eye of the cyclone nears land.

Copyright (c) 2012 Dow Jones & Company, Inc.

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