Wednesday, Jul 27, 2016
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Energy

Energy companies evacuate oil rigs, slash production

Cuba-Tropical-Weather

Waves pound the boardwalk, the Malecon, during the passing of Tropical Storm Isaac on Sunday in Havana, Cuba. The hurricane center said the storm, which was swirling north of the central coast of Cuba in the pre-dawn hours, was expected to be near or over the Florida Keys sometime later Sunday or Sunday night.

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Oil companies scrambled out of the path of Tropical Storm Isaac, withdrawing offshore workers and cutting oil and gas production in the Gulf of Mexico.

By mid-day Sunday, the U.S. government said that daily oil production in the Gulf was down 24 percent and natural gas production was off 8 percent.

Isaac, already carrying winds of more than 60 miles an hour, was expected to cross the Florida Keys by late afternoon. The storm will likely pick up strength from the warm, open waters of the Gulf of Mexico and strike as a dangerous Category 2 hurricane somewhere between New Orleans and the Florida Panhandle on Wednesday, the seventh anniversary of Hurricane Katrina.

Noting that the storm was moving west and threatening to grow more powerful, energy giant BP evacuated all its installations and temporarily halted production in the Gulf Sunday. Earlier, it had pulled workers from its massive Thunder Horse platform in the eastern Gulf.

Royal Dutch Shell is withdrawing all workers and suspending production in the eastern Gulf. It is pulling out all but essential personnel and cutting production in the central Gulf.

Apache Corp., a Houston oil services company, is withdrawing 750 workers and contractors from its installations in the eastern Gulf. It is also cutting production of oil and natural gas. Other energy companies have also been evacuating their platforms and rigs in the Gulf.

Murphy Oil Corp., based in El Dorado, Ark., said Sunday that it is pulling out all workers and suspending operations in the Gulf.

Overall, oil companies pulled workers off 39 (7 percent) of 596 production platforms and eight (11 percent) of 76 Gulf oil rigs, the U.S. Bureau of Safety and Environmental Enforcement reported Sunday.

Former energy trader Stephen Schork, who now edits a report on the oil industry, worries that the storm will be a repeat of Hurricanes Katrina in 2005 and Gustav in 208, damaging Gulf refineries and pipelines and disrupting oil tanker traffic.

But Fadel Gheit, oil analyst at Oppenheimer & Co., says that the explosion that rocked an oil refinery in Venezuela on Saturday, killing 26 people, will likely have a bigger impact than Isaac. It could drive up gasoline prices and "further erode consumer confidence and derail (the) economic recovery."

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