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)

U.S. energy firms tally damages from Hurricane Sally, begin restarts

By Erwin Seba

HOUSTON (Reuters) – Storm-tossed U.S. offshore energy producers and exporters began clearing debris on Thursday from Hurricane Sally and booting up idle Gulf of Mexico operations after hunkering down for five days.

The storm toppled trees, flooded streets and left almost 500,000 homes and businesses in Alabama and Florida without power. Sally became a tropical depression on Thursday, leaving widespread flooding along its path with up to a foot (30 cm) of rain falling in parts of Florida and Georgia.

Crews returned to at least 30 offshore oil and gas platforms. Chevron Corp began restaffing its Blind Faith and Petronius platforms in the Gulf of Mexico, following Murphy Oil Corp.’s restart.

Bristow Group, which transports oil workers from a Galliano, Louisiana, heliport, resumed crew-change flights to facilities in the west and central Gulf of Mexico.

“We are making flights offshore and experiencing a slight increase in outbound passengers,” said heliport manager Lani Moneyhon.

The Louisiana Offshore Oil Port, a deep water oil port that handles supertankers, reopened its marine terminal after suspending operations over the weekend.

Sally had shut 508,000 barrels per day (bpd) of oil production and 805 million cubic feet of natural gas, more than a quarter of U.S. Gulf of Mexico output, and halted petrochemical exports all along the Gulf Coast.

About 1.1 million bpd of U.S. refining capacity were offline on Wednesday, according to the U.S. Energy Department, including two plants under repair since Hurricane Laura and another halted by weak demand due to the COVID-19 pandemic.

Crude weakened early Thursday with U.S. futures down a fraction and trading below $40 a barrel. Gasoline futures inched higher in early trading, continuing gains this week.

Phillips 66, which shut its 255,600-bpd Alliance, Louisiana, oil refinery ahead of the storm, said it was advancing planned maintenance at the facility and would keep processing halted.

Royal Dutch Shell’s Mobile, Alabama, chemical plant and refinery reported no serious damage from an initial survey, the company said. Chevron said is a Pascagoula, Mississippi, oil refinery operated normally through the storm.

(Reporting by Erwin Seba; Writing by Gary McWilliams; Editing by Peter Cooney and Jonathan Oatis)