Gulf Of Mexico Output Falls Nearly 100% After Hurricane Nate

As of Sunday, 92.61 percent of crude oil production capacity in the Gulf of Mexico was shut in, the Bureau of Safety and Environmental Enforcement said. In barrels, this amounted to 1.62 million per day, with 298 platforms and 14 rigs evacuated, representing 40.43 percent and 70 percent of platforms and rigs in the Gulf, respectively. Another 10 rigs, dynamically positioned ones, were moved from their locations as a precaution.

Nate, which made final landfall in Mississippi, has been moving inland and has in the process weakened back into a tropical depression. Heavy rains are in the forecast, according to the Weather Channel, but oil and gas field and refinery operators are already preparing to restart their shut-in facilities

Chevron and Shell are bringing back personnel to the platforms and doing assessments on the infrastructure, including platforms, pipelines, and terminals. New Orleans has already resumed normal port operations and vessel traffic, quenching worries that Nate will disrupt oil and fuel shipments from one of the main Gulf Coast ports.

Chevron also said it was assessing the impact of the hurricane on its Pascagoula refinery, which has a daily capacity of 340,000 bpd, and which Genscape said Chevron had shut down on Saturday. Chevron never confirmed the report, and on Sunday there were signs of activity at the refinery.

Phillips 66, however, shut down its Alliance refinery, with a capacity of 247,000 bpd, and has now reported it undamaged from the hurricane. The company planned to restart the facility yesterday, but because of a crude oil shortage in the Gulf, it may take a few more days for the refinery to resume normal operations.

This shortage should have a beneficial if short-lived effect on prices as well as on inventories while the platforms and refineries that were shut down return to normal operation.

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