Storm-weary U.S. offshore energy firms prep for massive hurricane

By Erwin Seba

HOUSTON (Reuters) – Oil and gas workers withdrew en masse from U.S. offshore production facilities and onshore refineries began preparations on Wednesday as Hurricane Delta was forecast to grow into a powerful storm over the Caribbean on its way to the Gulf of Mexico.

Delta’s winds declined to 105 miles per hour (169 kph) as it tore across Mexico’s Yucatan peninsula early Wednesday. It is expected to enter the Gulf of Mexico and re-intensify into a Category 3 storm, the National Hurricane Center said.

Oil producers had evacuated 57 production facilities in the U.S. Gulf of Mexico by Tuesday and halted 540,000 barrels per day of oil and 232 million cubic feet per day of natural gas production. The region accounts for about 17% of U.S. oil output.

Onshore energy facilities and export ports began securing operations. Royal Dutch Shell Plc was preparing three refineries in Convent, Geismar and Norco, Louisiana, for Delta’s arrival. Louisiana Offshore Oil Port, the sole deep water port on the Gulf of Mexico, halted seaborne exports and imports.

After weakening over the Yucatan, Delta is expected to re-strengthen and grow into a massive storm. A “life-threatening storm surge and strong winds are likely over a large portion of the northwestern and northern Gulf coast,” the NHC said.

Energy prices were mixed. Natural gas futures were up nearly 2% on storm shut-ins and export disruptions. U.S. crude oil and gasoline futures each fell about 3%.

Delta is expected to strike the U.S. Gulf Coast on the weekend as the 10th named storm to make a U.S. landfall this year, eclipsing a record that has held since 1916.

Oil companies have had to evacuate workers repeatedly this year with departures and returns complicated by pandemic related quarantines and virus testing for offshore staff.

Delta’s evacuations were at least the sixth time that some companies have had to remove staff and curtail production since June.

W&T Offshore Inc, one of the smaller Gulf of Mexico producers, estimated the storms cost it 9,000 barrels of oil and gas per day in the latest quarter, more than a fifth of its targeted output.

Phillips 66 said Delta would delay the restart of its Lake Charles refinery, a Louisiana plant shut by August’s Hurricane Laura. A second plant, on the Louisiana coast, has remained closed since a mid-September storm for maintenance.

Shell, the largest Gulf of Mexico offshore oil producer by volume, evacuated staff from nine facilities and Chevron Corp evacuated and shut production on all its Gulf of Mexico platforms. BP Plc, BHP, Occidental Petroleum Corp, and Murphy Oil pulled workers out and halted some production.

(Reporting by Erwin Seba; writing by Gary McWilliams; Editing by Leslie Adler and Marguerita Choy)

Hurricane Delta weakens before landfall near Mexico’s Cancun

By Anthony Esposito

CANCUN, Mexico (Reuters) – Hurricane Delta rapidly lost strength before landfall near top Caribbean getaway Cancun on Wednesday, potentially saving the area’s hotels, condos and Mayan indigenous villages from an onslaught threatened when it was a menacing Category 4 storm.

Delta had weakened to Category 2 on the five-step Saffir-Simpson scale of intensity, with winds of 110 miles per hour (175 km per hour), by the time it hit the coast close to Puerto Morelos, a fishing village popular with tourists.

Cancun scrambled to shutter shops and evacuate tourists from beach hotels on Tuesday as Delta rapidly gathered strength over the warm Caribbean and looked to be one of the strongest hurricanes to threaten Cancun in years.

Even as a weaker storm, Delta’s arrival is a blow to Mexican efforts to revive tourism in the surrounding beach-lined state of Quintana Roo, where the industry has been battered by the coronavirus pandemic.

“I want to go home, this is crazy,” said Dee Harris, a 29-year-old from Michigan who came to Cancun with his partner and had been due to leave before the storm led to the cancellation of their flight. “The vacation was good before this.”

Delta is also disrupting the oil industry, with companies shutting down offshore production platforms and withdrawing workers.

Peak sustained winds of 84 mph (135 km/h) were recorded at a weather station in Cancun, which is about 24 miles (38.5 km) from snorkeling spot Puerto Morelos close to the eye of the storm.

Delta was expected to pass through Quintana Roo in 10-14 hours, state governor Carlos Joaquin said.

“Hopefully, that speed means it won’t do us so much damage,” Joaquin told Mexican radio.

Slow-moving hurricanes often do more destruction than those with faster lateral movement because they have more time to unleash their force on structures.

Delta is expected to lose some wind power over the peninsula before gathering strength again in the Gulf of Mexico.

On Tuesday, residents queued at supermarkets to stock up on provisions in anticipation of disruptions, while the state government readied shelters that need extra space due to coronavirus social-distancing requirements.

Officials ordered the evacuation of Cancun’s hotel zone and other coastal areas, while shop workers boarded up windows.

A hurricane watch was in place from the beach town of Tulum westwards, including Cozumel.

Water levels could rise by up to 9 feet (3 m) over normal tide conditions due to Delta, the NHC said.

The Yucatan peninsula had already taken a hit at the weekend from Hurricane Gamma, a smaller storm that damaged property and forced restaurants and other attractions to close.

(Writing by Frank Jack Daniel; Editing by Nick Zieminski)