- Energy companies cut 1.6 million barrels, 59% of the oil in the Gulf of Mexico
- Workers flee 90 offshore facilities; Refineries cut production
HOUSTON, Aug. 27 (Reuters) – U.S. oil and gas companies cut more than 1.6 million barrels of oil production on Friday as a major storm headed for oil fields, which account for 17% of the country’s oil production.
Production cuts prior to Hurricane Ida exceed those during the devastating Katrina in 2005
Ida invaded Cuba on Friday after intensifying into a hurricane with winds of 85 miles per hour (130 km / h), according to the National Hurricane Center (NHC). It could become “an extremely dangerous major hurricane” and threaten the US Gulf Coast with “catastrophic wind damage,” the NHC said. L1N2PY0T2
Leading oil producer in the Gulf of Mexico, Royal Dutch Shell Plc (RDSa.L), said it has ceased production at seven offshore platforms and two processing facilities onshore. BP Plc (BP.L) has stopped working on four platforms. Both said they would evacuate offshore workers.
Chevron Corp. (CVX.N) said it is ceasing production on its six platforms in the Gulf of Mexico and evacuating all workers. BHP (BHP.AX) and Equinor (EQNR.OL) were pulling workers out of offshore facilities, spokesmen said. Continue reading
According to the US offshore regulator, the oil companies had ceased 59% of oil production in the Gulf and 49% of natural gas production. A total of 90 offshore installations were evacuated and 11 drilling ships were brought out of the danger zone.
“This could be comparable in intensity to Hurricanes Laura and Harvey,” said Joe Bastardi, chief forecaster at Weatherbell Analytics, referring to two hurricanes with winds of at least 209 km / h. “In the worst case, it could go up to Category 5,” he said.
During Katrina, a hurricane that devastated Louisiana, supplies were reduced by up to 1.53 million barrels a day. Production downtimes due to damaged platforms and refineries lasted for weeks. Last year’s delta included up to 1.69 million barrels a day.
Gasoline maker PBF Energy has cut production at its Chalmette refinery, people familiar with the matter said, and Phillips 66 said it is laying off non-essential workers and ceasing production at its Alliance, Louisiana facility. Shell will also cease fuel production at its Norco refinery and chemical production at its Geismar, Louisiana facility.
Oil prices rose nearly 2% on Friday, the largest weekly increase in over a year. Read More
Over 45% of US refining capacity is along the Gulf Coast. Continue reading
Louisiana Governor urged residents to prepare for a major storm, President Joe Biden issued a federal emergency declaration, and New Orleans and coast officials urged residents to move to higher elevation areas. Last year, five storms hit land in Louisiana, causing billions in damage. Continue reading
Reporting by Sabrina Valle, Erwin Seba; Editing by Dan Grebler and Howard Goller
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