Three-quarters of U.S. Gulf of Mexico oil output remains shut

September 8, 2021

By Marianna Parraga and Sabrina Valle

HOUSTON (Reuters) – More than three-quarters of the U.S. Gulf of Mexico’s offshore oil and natural gas output remained shut on Wednesday as the fallout from Hurricane Ida continued to hamper production.

Some 1.4 million barrels per day (bpd) of crude production and over 1.72 billion cubic feet per day of natural gas output were shut-in. More than 70 platforms of the 288 evacuated ahead of the August storm remain unoccupied, according to the Bureau of Safety and Environmental Enforcement (BSEE).

Occidental Petroleum disclosed that 7 of its 10 offshore production platforms remain offline since Ida. Restarts have been delayed by damages to offshore oil and gas transfer facilities and onshore processing operations, it said.

Royal Dutch Shell this week said a production hub that brings oil and gas from three offshore oilfields was damaged by the storm. It has been unable to determine the full extent of the damage or provide a schedule for restarting.

POWER REMAINS OUT

There were about 325,000 homes and in Louisiana without power on Wednesday, down from more than 1 million last week. Areas struggling to regain power and water include regions essential to bringing crews and equipment offshore.

Refineries away from the coast have been regaining power and beginning to restart. Exxon Mobil plans to complete restarting its 520,000 barrel-per-day (bpd) Baton Rouge refinery this week, sources familiar with operations said on Wednesday.

Exxon requested 1.5 million barrels of crude from the national Strategic Petroleum Reserve for Baton Rouge.

Analysts expect other refineries to also request crude if Gulf’s oil producers cannot restore output after assessing damages caused by the storm and performing repairs.

Refiners struggling to get processing online contributed to a shortage of fuel in Louisiana, which is slowing helicopter companies’ ability to re-deploy staff to offshore platforms.

Ida’s impact over U.S. offshore energy output makes it one of the most costly since back-to-back storms in 2005 cut output for months, according to the latest data and historical records.

(Reporting by Marianna Parraga and Sabrina Valle; Editing by Chris Reese and Nick Zieminski)

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