60 percent Gulf of Mexico oil output shut by Lee: U.S.

Reuters News
Posted: Sep 04, 2011 5:08 PM
60 percent Gulf of Mexico oil output shut by Lee: U.S.

By Kristen Hays

HOUSTON (Reuters) - More than half of crude oil output in the Gulf of Mexico was shut in on Sunday as Tropical Storm Lee hindered efforts to restaff and restart oil and gas platforms in the basin.

Lee reached Louisiana's coast early Sunday, but was moving inland very slowly. Its 45 miles per hour winds grounded helicopters on standby for oil and gas companies when they otherwise would ferry workers out to do post-storm assessments and restaff facilities.

On Sunday afternoon, Lee was about 110 miles west-northwest of New Orleans, with maximum sustained winds of 45 mph and was moving about 8 miles per hour The National Hurricane Center said those winds stretched as wide as 275 miles from the center of the storm.

"We are waiting for helicopter services to resume operations so we can send assessment teams out to the platforms ahead of returning full crews, hopefully by tomorrow," said Barry Jeffrey, spokesman for Murphy Oil Corp.

U.S. regulators said 843,223 barrels per day, or 60.2 percent, of Gulf oil output was shut in, just 0.1 percentage point less than Saturday.

Natural gas production restarts fared better, with 2.3 billion cubic feet of natural gas output, or 44.3 percent, still shut in -- down from 54.6 percent on Saturday, the U.S. Bureau of Ocean Energy Management said.

The Gulf accounts for 27 percent of the country's oil production and about 8 percent of U.S. natural gas output, according to the U.S. Energy Information Administration.

The Gulf Coast also is home to about 40 percent of the nation's refining capacity, with numerous plants along the Mississippi River corridor around New Orleans.

Refiners said on Sunday that operations were normal despite Lee's winds and rain.

"Our units are operating normally. We are still closely watching TS Lee as it meanders along the coast," said Will Hinson, spokesman for the 192,500 bpd joint-venture refinery Exxon Mobil Corp operates with PDVSA, Venezuela's government-controlled oil company, in Chalmette, Louisiana.

Royal Dutch Shell and Anadarko Petroleum Corp on Saturday began restaffing and restarting platforms in the far western part of the Gulf, where helicopters often ferry workers from the Texas Coast. Like others, Shell held back on restaffing other operations on Sunday.

"We're able to redeploy personnel to some areas, but not all," said Kelly op de Weegh, a spokeswoman for Royal Dutch Shell. "We'll continue sending staff back out tomorrow, weather permitting."

Shell, Anadarko and other major Gulf producers, including BP PLC and Chevron Corp, have platforms in the two areas south of Louisiana with the heaviest concentrations of oil and gas platforms -- Mississippi Canyon and Green Canyon. (Reporting by Kristen Hays; editing by Gunna Dickson)