© Reuters. FILE PHOTO: Boat sails near the oil rig in the Gulf of Mexico
HOUSTON (Reuters) – Oil producers shut down 13% of crude oil production on Saturday before tropical storms Laura and Marco will grind the Gulf of Mexico in the coming days. This was shown by US government data.
Storms Marco and Laura are ready to turn into hurricanes by mid-week, making successive landings along the central Gulf coast. It is rare for two to spin in the gulf at the same time, and the coastal communities have raised concerns about double barrel hits.
However, a storm is not expected to become a larger hurricane, and its potential trails cover a large area of the Gulf Coast, forecasters said.
Murphy Oil Corp. (N 🙂 and BHP (AX 🙂 evacuated some workers on Saturday, and Royal Dutch Shell Plc (L 🙂 started shutting down oil and gas production at most offshore operations. Murphy made plans for possible production cuts, the company said.
BP Plc (L 🙂 and Chevron Corp (N 🙂 started production shutdowns on Friday. Occidental Petroleum (NYSE :), the third largest offshore producer in the Gulf of Mexico, said it is implementing weather-related procedures.
Producers cut 240,785 barrels of oil per day and 119 million cubic feet per day of production before noon on Saturday, the US Department of Safety and Environment regulators said.
The crews were evacuated from six production and four oil rigs. Another seven drillships have been removed from the storms' paths, BSEE reported.
Storm Marco grabbed 100 mph wind on Saturday and was slated to become a Category 1 hurricane before landing in southeast Louisiana on Monday. Storm Laura is expected to become a Category 1 hurricane and hit the northern Gulf Coast a day or two after Marco.
"We don't see the intensity and the increasing risk," said Matt Rogers (NYSE :), president of the Commodity Weather Group, which advises energy and agricultural companies. The prospect of either becoming a harmful Category Three storm is only 10%, he said.
Unlike Hurricane Harvey, which struck the region three years ago, neither is likely to linger inland, reducing the risk of coastal flooding.
On Saturday, helicopters crossed the Gulf of Mexico taking workers off platforms as a precaution, said Tony Hermans, base manager at the Bristow Galliano helipad in southern Louisiana. Planned evacuations will be completed by Sunday, he said.
Offshore drilling in the US Gulf of Mexico accounts for 17% of total oil production and 5% of total US natural gas production. The region along the coast from Texas to Mississippi also accounts for 45% of total US oil refining capacity.
The Louisiana Offshore Oil Port, a major oil export and import terminal, reported having begun implementing weather procedures.
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