Bloomberg News

Energy Companies Shut Operations, Remove Workers as Storm Nears

October 03, 2013

Anadarko Petroleum Corp. (APC:US) and Exxon Mobil Corp. (XOM:US) halted production while other energy companies evacuated workers from platforms and pipelines in the Gulf of Mexico as Tropical Storm Karen triggered a hurricane watch.

Exxon curtailed output by 1,000 barrels of oil equivalent a day and was evacuating nonessential personnel from offshore operations in Karen’s path. Anadarko was shutting the Neptune platform and evacuating workers from three other platforms. BP Plc (BP/), Chevron Corp. (CVX:US), Enterprise Products Partners LP (EPD:US), Marathon Oil Corp. (MRO:US) and Royal Dutch Shell Plc (RDSA) were also moving personnel out of the system’s track.

The storm “appears to be heading through the heart of the production center of the Gulf of Mexico, and that will impact oil and gas production,” Andy Lipow, president of Lipow Oil Associates LLC in Houston, said by telephone.

The region is home to 23 percent of U.S. oil production, 5.6 percent of gas output and more than 45 percent of petroleum refining capacity, data compiled by the Energy Information Administration, the Energy Department’s statistical arm, show.

Karen’s top sustained winds strengthened to 65 miles (105 kilometers) per hour today, up from 60 mph earlier. It was about 430 miles south of the mouth of the Mississippi River and moving north-northwest at 12 mph, the National Hurricane Center in Miami said in an advisory at 2 p.m. New York time.

Possible Path

The center’s tracking map forecasts Karen will make landfall as a strong tropical storm near the Florida-Alabama line early Oct. 6.

A hurricane watch, meaning storm conditions may arrive in two days, was posted from Grand Isle, Louisiana, to Indian Pass, Florida. New Orleans, as well as the coast from Grand Isle to Morgan City, Louisiana, is under a tropical storm watch.

Destin Pipeline LLC, which can transport 1.2 billion cubic feet of gas a day from the Gulf, declared a force majeure today, saying in a notice to shippers that it’s incapable of providing transportation services from its offshore receipt points because of the storm.

LOOP LLC, the only U.S. port capable of offloading ultra-large crude carriers, is monitoring Karen, the Covington, Louisiana-based company said in a statement on its website today. Nexen, the Cnooc Ltd. (883) subsidiary based in Calgary that operates in the Gulf of Mexico, is also tracking the system.

Workers Pulled

BP, based in London, began evacuating workers yesterday from its four deepwater platforms, Thunder Horse, Na Kika, Atlantis and Mad Dog. Marathon was removing nonessential workers from the Ewing Bank platform 130 miles (209 kilometers) south of New Orleans, the Houston-based company said on its website today.

Anadarko, with headquarters in The Woodlands, Texas, was evacuating similar employees from the Independence Hub, and the Neptune, Constitution and Marco Polo platforms. The Hague-based Shell was removing some non-essential personnel from drilling operations in the eastern Gulf, the company said on its website.

Enterprise Products Partners LP, based in Houston, was evacuating all workers from four platforms connecting production to pipelines, Rick Rainey, a company spokesman in Houston, said by telephone. One of the platforms will be shut, he said.

Era Helicopters LLC, a Lake Charles, Louisiana-based company that transports workers to oil and gas fields in the Gulf, has had at least one oil and gas customer activate a hurricane standby aircraft, Molly Hottinger, spokeswoman for Era in Lake Charles, said by e-mail today.

Platforms Emptied

Enbridge Inc. (ENB)’s Manta Ray Offshore Gathering system, which collects 800 million cubic feet of gas a day in the Gulf, began evacuating personal from two platforms, the company’s website showed.

“We will continue to watch the storm closely to determine if further evacuations are necessary,” Terri Larson, an Enbridge spokeswoman in Houston, said by e-mail. “There is no impact to operations.”

Karen may encounter wind shear as it crosses the Gulf of Mexico, said Matt Rogers, president of the Commodity Weather Group LLC in Bethesda, Maryland. Shear, when winds blow at varying speeds or directions at different altitudes, could tear at the storm’s structure.

Energy markets are expecting supply disruptions to be “rather short-lived” since the storm isn’t forecast to develop into a major hurricane, Lipow said.

Gasoline futures for November delivery rose 1.09 cents, or 0.4 percent, to settle at $2.6396 a gallon on the New York Mercantile Exchange. Oil dropped 0.8 percent, and natural gas declined 1.2 percent.

To contact the reporter on this story: Lynn Doan in San Francisco at ldoan6@bloomberg.net

To contact the editor responsible for this story: Dan Stets at dstets@bloomberg.net


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Companies Mentioned

  • APC
    (Anadarko Petroleum Corp)
    • $109.8 USD
    • -1.20
    • -1.09%
  • XOM
    (Exxon Mobil Corp)
    • $103.5 USD
    • -0.78
    • -0.75%
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