Most US Gulf Oil Output Offline Ahead of Tropical Storm Nate
HOUSTON, Oct 6 (Reuters) - Nearly three-quarters of U.S. Gulf of Mexico oil production was offline on Friday ahead of Tropical Storm Nate, with companies across the Gulf Coast energy sector bracing for the second major storm in as many months to menace the region.
Nate was moving over Mexico's Yucatan Peninsula at about 21 miles per hour (34 kph) on Friday afternoon and is expected to strike the U.S. Gulf Coast late Saturday as a hurricane, according to the National Hurricane Center.
That path takes it right through the most-active oil-producing region of the Gulf, with myriad wells and producing platforms. Producers moved quickly to shut-in wells on Friday, taking more than 1 million barrels of oil in daily production offline since Thursday, according to government data.
Nate has already pushed nearly three times as much Gulf crude production offline as Hurricane Harvey did in August. At its height, Harvey shut-in only about 25 percent of the region's oil production.
ConocoPhillips on Friday said it began evacuating non-essential personnel from its Magnolia oil platform in the central Gulf of Mexico, joining other six other producers that have withdrawn workers or curbed production.
Chevron Corp went a step further and shut down its 4,100-mile (6,598 km) pipeline subsidiary, saying it would not accept or deliver crude until after Nate subsided.
Matt Rogers, meteorologist at Commodity Weather Group, said the speed of the storm could leave it as a Category 1 hurricane with up to 80 mile per hour (129 kph) winds.
"In our view it is not going to be strong enough to do damage" to offshore production facilities, he said. "Usually when storms move this quickly they have troubles developing," he said.
The region's oil refineries are still recovering from Harvey, which shut production at some plants for weeks. Producers also curtailed some production but quickly resumed output.
Royal Dutch Shell Plc decided against cutting operations at its 225,800 barrel-per-day (bpd) Norco, Louisiana, refinery, reversing an earlier decision to cut rates.
On Thursday, refiner Phillips 66 said it was preparing to shut its 247,000 bpd Alliance, Louisiana, refinery as a precautionary measure. It is located 25 miles (40 km) south of New Orleans.
Commodity Weather forecast Nate to bring moderate rainfall when it makes landfall somewhere west of Mobile Bay, Alabama, and east of New Orleans, Louisiana. It expects between 4 inches and 6 inches (10-15 centimeters) of rain to fall in the path of the storm.
The U.S. Gulf of Mexico is home to about 17 percent of the nation's crude oil output and 5 percent of dry natural gas output, according to the U.S. Energy Information Administration. More than 45 percent of the nationâ€™s oil refining capacity is along the U.S. Gulf Coast. (Reporting by Ernest Scheyder; Additional reporting by Gary McWilliams and Erwin Seba; Editing by Marguerita Choy)
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- KBR, ConocoPhillips to Develop Off-the-Shelf LNG Tech (Sep 18)
- ConocoPhillips Settles With Venezuela's PDVSA To Recover $2B (Aug 20)
- 'New Player' Enters Louisiana Austin Chalk (Aug 13)