U.S. offshore oil recovery begins with ports, refineries restarting

September 4, 2021

By Erwin Seba

HOUSTON (Reuters) – U.S. Gulf Coast energy companies on Saturday got a boost by a reopening of ports and restart of oil refineries shut by Hurricane Ida, but damage to key facilities continued to crimp oil production.

The ninth named storm of the 2021 Atlantic hurricane season has cut more U.S. oil and gas production than any of the eight named storms to strike the U.S. Gulf Coast last year. After landfall in Louisiana last Sunday, Ida raced to the U.S. northeast, causing deadly flooding.

Royal Dutch Shell Plc, the largest U.S. Gulf Coast producer, was still evaluating damage to its West Delta-143 offshore platform, which when operating transfers about 200,000 barrels of oil and gas per day from three offshore oil fields.

Shell’s work on a replacement heliport needed to ferry offshore continued, Shell said. Damages to its original facility prevented a return of offshore workers to platforms.

Several heliports in Louisiana were damaged or without power and access to fuel, slowing crew returns at several major oil producers.

REFINERS BEGIN RESTARTS

Shell’s 230,611 barrel-per-day (bpd) Norco, Louisiana, oil processing plant also remained knocked out by the storm. The refinery sustained damage and assessments continue on its status and at a Geismar, Louisiana, chemical plant, the company said.

The White House this week agreed to provide a combined 1.8 million barrels of crude oil from the nation’s Strategic Petroleum Reserve (SPR) to refiners’ Exxon Mobil and Placid Refining Company to produce gasoline.

Nine refineries were knocked offline by Ida’s winds and utility power losses. Five, including those owned by Exxon, Placid and Marathon Petroleum Corp., could be back online by within two weeks, estimated Robert Campbell, head of oil products research at consultancy Energy Aspects.

About half the originally evacuated offshore platforms remained unoccupied and 93% of oil production and 89% of natural gas was offline, government data showed on Friday. Some wells in the Gulf of Mexico, which accounts for about a fifth of U.S. output, could be shut for weeks, analysts said.

MISSISSIPPI RIVER OPENS

The lower Mississippi River and New Orleans ports were reopened to traffic and cargo operations, the Coast Guard said. The reopening will allow for resumption of grain, metal and energy shipments.

“It was imperative for the economy of the region and entire United States that the river be re-opened in a timely manner,” said Brett Bourgeois, executive director of maritime trade group New Orleans Board of Trade.

Over 5,000 deep drafts vessels bring cargo in and out of the five major ports, he said. 

The Louisiana Offshore Oil Port (LOOP), which is near to where Ida made landfall with 150 mile per hour (240 kph) winds, was continuing repairs and assessments of its facilities, it said on Saturday.

The LOOP is the nation’s only deepwater oil port, with an offloading platform that can receive more the 1 million barrels a day of crude. Its marine terminal sits 18 miles south of Grand Isle, Louisiana.

POWER SLOWLY RETURNS

Utility Entergy Corp on Saturday said most of Baton Rouge should have power restored by Tuesday and most of New Orleans by Wednesday. However, areas between the two could be without electricity through month’s end. More than 700,000 homes and businesses in Louisiana remain without power, according to PowerOutage.com.

U.S. weather forecasters were warning about a new tropical disturbance, expected to move north across the Gulf of Mexico next week that could bring more rains to Louisiana.

The U.S. National Hurricane Center gave the disturbance at least a 30% chance of becoming a tropical depression. If it becomes a tropical storm, with winds of at least 39 miles per hour (63 kph), it will be named Mindy.

(Reporting by Erwin Seba; Editing by Gary McWilliams and Alistair Bell)

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