Argus Media Limited

09/10/2021 | News release | Distributed by Public on 09/10/2021 12:56

US Gulf oil output rises from storm shut-ins

Gulf of Mexico offshore producers restored more oil output in the past day that was shut in as a result of Hurricane Ida 12 days after the storm made landfall.

The volume of offshore oil output still halted as a result of the storm was at 66pc, or 1.208mn b/d, as of 12:30pm ET today, according to the Bureau of Safety and Environmental Enforcement (BSEE). That compares with 76pc, or 1.392mn b/d, yesterday - which was a small improvement over the prior day.

About 76pc of offshore natural gas production was also off line, down from 77.2pc on 9 September. Six more offshore platforms were restaffed since yesterday.

Producers had been struggling to ramp up operations after the storm, with Shell still assessing damage to a key offshore transfer station and power outages and onshore facilities also hampering the recovery.

Shell said last night it was starting the process of returning staff to its Mars platform, and continuing redeployment to its Enchilada/Salsa, Auger, and Appomattox assets. All are currently off line.

The company, which is a major Gulf of Mexico producer, declared a force majeure yesterday on 'numerous' crude delivery contracts because of damage to the West Delta-143 platform that moved 233,000 b/d of Mars crude from three Shell platforms - Mars, Olympus and Ursa - in the first seven months of the year.

Late yesterday, the US authorized a second loan of 1.5mn bl of crude from the Strategic Petroleum Reserve (SPR) to ExxonMobil's 500,000 b/d refinery in Baton Rouge, Louisiana. That followed an initial short-term loan of 1.5mn bl of crude to the refinery announced last week that was intended to help alleviate fuel shortages in the state. Both deliveries are for sour crude, while Placid Refining's 75,000 b/d refinery in Port Allen, Louisiana, will be getting sweet crude. All of the loaned crude is coming from the SPR's Bayou Choctaw facility, but it is not yet clear how much has been delivered to the refineries so far. For the week ending 3 September no crude had been withdrawn from the SPR, according to Energy Information Administration data.

'We are processing the crude from the Strategic Petroleum Reserve at our Baton Rouge Refinery to provide fuel where it is needed,' ExxonMobil said.

Separately, the Louisiana Offshore Oil Port (LOOP), which suspended deliveries ahead of Hurricane Ida, appears to have restarted some operations, according to a company notice. LOOP 'continues to work with shippers to receive and deliver crude oil to regional refineries,' the company said. LOOP also said that 'the supply chain is functioning.'

And NuStar Energy said it has resumed full service at its crude terminal in St James, Louisiana, after power was fully restored to the facility.

By Stephen Cunningham

US Gulf of Mexico offshore production Status 12:30pm ET 10 Sept
Total Change from 9 Sept % of GOM
Oil shut-in b/d 1,207,783 -184,082 66.4
Natural gas shut-in mn cf/d 1,685 -38 75.6
Platforms Evacuated 65 -6 11.6
Rigs Evacuated 3 -1 27.3
- BSEE