About half of the US Gulf of Mexico oil and gas volumes offline ahead of Zeta

Published on : 2020-10-27

Spglobal - Roughly half of all the oil and gas production from the US Gulf of Mexico was shut in Oct. 27 ahead of Tropical Storm Zeta, which is expected to again strengthen into a hurricane before making a projected landfall in southeastern Louisiana.

An estimated 914,811 b/d of crude production and 1,500 MMcf/d of natural gas production was shut in, reflecting 49.45% and 55.35% of US Gulf output, respectively, according to the US Bureau of Safety and Environmental Enforcement. About 25% of the Gulf's platforms and rigs, or 157 facilities, have been evacuated thus far, BSEE said, with more underway.

Chevron, Shell, BP, BHP, Murphy Oil and Equinor all confirmed they've shut down platforms and production ahead of the storm. BP and Chevron count among those shutting-in all of their operated platforms.

"In preparation for the tropical weather, we have begun evacuating all personnel from our Chevron-operated Gulf of Mexico platforms and are shutting-in the facilities," Chevron said in a statement.

BP said it was shutting-in its four operated platforms -- Atlantis, Mad Dog, Na Kika and Thunder Horse -- and evacuating personnel.

Shell, on the other hand, is only closing down its Stones FPSO thus far, which happens to be its Gulf project that's farthest offshore.

"As a precautionary measure at our Stones asset, we have begun evacuating non-essential personnel and shut in production," said Shell spokeswoman Cindy Babski in a statement on Oct. 27. "We have safely paused some of our drilling operations and currently have no other impacts to our production across the Gulf of Mexico."

BHP spokeswoman Judy Dane said the Australian firm shut-in and evacuated its Shenzi and Neptune, while Equinor said it shut-in production at its Titan platform.

Murphy oil spokeswoman Megan Larson said the offshore production is "evacuating and shutting in certain facilities," but would not name specific assets.

Occidental Petroleum was more vague, saying in a statement, "All of our facilities have plans to prepare for weather-related events, and those in the storm's potential path are implementing those procedures."

Setting records

Oil and gas volumes in the US Gulf will yet again be disrupted from a record-setting 2020 Atlantic hurricane season. Zeta is the 27th named storm of the year, tying the 2005 record with more than a month remaining in the season.

Earlier in October, Hurricane Delta forced more than 90% of the US Gulf's nearly 1.9 million b/d of crude production to be shut in, but Zeta isn't expected to take that much production offline.

Zeta strengthen into a Category 1 hurricane Oct. 26 before making an initial landfall near Mexico's Yucatan Peninsula and weakening back to tropical storm status. Zeta is expected to strengthen back into a hurricane later on Oct. 27 and make a second landfall late Oct. 28 near southeastern Louisiana, according to the National Hurricane Center.

Named storms Delta, Beta, Sally, Marco, Laura, Hanna and Cristobal have all disrupted activities in the Gulf from June through October.

The current path of the hurricane targets roughly 2.7 million b/d of refining capacity, mostly in Louisiana.

Refiners continue to monitor the storm, based on their hurricane readiness and response plans.

"We are closely monitoring Tropical Storm Zeta. Operations are currently normal," said ExxonMobil spokesman Jeremy Eikenberry about the status of its 517,000 b/d Baton Rouge, Louisiana plant.

Shell said it plans to keep operating its refineries and petrochemical plants in Louisiana and Alabama during the storm.

Decisions to slow or shut down plant depending on the intensity, location and timing of landfall of the storm are likely to be made within the next 24 hours, sources familiar with operations at several refineries said.

Citgo Petroleum's Lake Charles Refinery in Louisiana has been offline since it sustained damages from Hurricane Laura in August, although the refinery is expected to come back online in about a week or so. Phillips 66's Alliance Refinery in Belle Chasse, Louisiana  also remains offline for maintenance work.

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