- The Washington Times - Wednesday, September 28, 2005

DALLAS — Hurricane Rita may have caused more damage to rigs and platforms than any Gulf of Mexico storm — even its formidable predecessor Hurricane Katrina, oil and gas analysts said yesterday.

The double whammy of those hurricanes already has cost the Gulf almost 7 percent of its annual oil production and 5 percent of its yearly natural gas output, according to a report yesterday from the U.S. Minerals Management Service.

“The impact on the rigs is something that’s never been seen by this country before,” said Daniel Naatz, director of federal resources for the Independent Petroleum Association of America.

ODS-Petrodata, which provides data and information to the industry, reported 13 rigs already seriously damaged or destroyed by Rita. Platform damage still is being assessed, said ODS-Petrodata analyst Tom Marsh.

“You may think that 13 is not a significant amount, but this is 10 percent of the contracted fleet out of service for various lengths of time or, in some cases, permanently,” Mr. Marsh said.

Meanwhile, nine of 12 pipelines that move gas and oil onshore remain shut down or are operating at less than 100 percent capacity, according to the latest report by the Association of Oil Pipe Lines.

Refineries in the hardest-hit areas of Beaumont and Port Arthur, Texas, plus Lake Charles, La., still are not operating, costing about 1.7 million barrels per day in refined products, according to the U.S. Department of Energy.

They include:

• Citgo Petroleum Corp.’s Lake Charles 324,000-barrels-per-day facility.

• ConocoPhillips Co.’s West Lake, La., 239,000-barrels-per-day refinery.

• Exxon Mobil Corp.’s 348,000-barrels-per-day Beaumont plant, the largest producer in that area.

• A 285,000-barrels-per-day joint venture between Royal Dutch Shell PLC’s Shell Oil Co. and Motiva Enterprises LLC.

• Total SA’s 233,500-barrel-a-day Port Arthur facility.

• Valero Energy Corp.’s 255,000-barrel-a-day plant in Port Arthur.

The slow pace of recovery for the Gulf refineries, rigs and platforms, and concerns about demand for heating oil this winter and for gasoline as the economy bounces back from Katrina and Rita, drove up oil futures yesterday.

Light, sweet crude for November delivery rose $1.28 to $66.35 per barrel on the New York Mercantile Exchange. Natural gas futures for October rose more than $1 to $13.9 per million British thermal units.

Heating oil gained more than 7 cents to settle at $2.14 a gallon, while gasoline gained more than 17 cents to settle at $2.34 a gallon — an increase of nearly 8 percent.

Industry executives and analysts say consumers and companies should brace for an expensive winter. And natural gas prices could soar more than fuel oil because, unlike crude oil, there are no natural gas reserves to tap.

Since Katrina struck, the country has received oil injections from the Strategic Petroleum Reserve and the International Energy Agency.

“This would be a good time to have a warm winter,” said Ron Gold, vice president of the Petroleum Industry Research Foundation.

Assessing damage is taking longer than post-Katrina efforts, with some findings not expected until late this week or early next week.

Companies still were evaluating the damage wrought by Katrina when Hurricane Rita bore down on the country’s energy hub.

The U.S. Minerals Management Service reported that 593 platforms and 64 rigs still remain evacuated.

That is 72 percent of the 819 manned platforms and 48 percent of the 134 rigs with operations in the Gulf of Mexico.

Rigs are tethered to the Gulf’s floor and are not nearly as secure in storms.

They typically are evacuated before platforms, which are used to pump the oil once the well has been drilled.

“I hate to say with absolute certainty that this is the worst storm damage we’ve seen, but we have had more rigs reported with severe damage than any other storm I can recall in the last 15 years,” Mr. Marsh said.

He said the company’s pre-hurricane projections already had called for a rig shortage by early next year, but the back-to-back storms could push that shortage to come as early as November.


Copyright © 2018 The Washington Times, LLC. Click here for reprint permission.

The Washington Times Comment Policy

The Washington Times welcomes your comments on Spot.im, our third-party provider. Please read our Comment Policy before commenting.

 

Click to Read More and View Comments

Click to Hide