OFFSHORE DRILLING:
Gulf activity gradually getting back to business after Isaac
EnergyWire:
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HOUSTON -- Business for the Gulf of Mexico's offshore energy industry is slowly returning to normal as crews are discovering little to no damage to platforms and rigs in the wake of Hurricane Isaac's landfall last week.
Oil and gas companies are still busy returning personnel to the installations they shut in as the storm approached. The vast majority of offshore platforms and drilling rigs are now restaffed, and oil and gas production is ramping back up.
But a weather disturbance developing in the east-central Gulf could cause further delays and disruptions if it develops into a tropical storm, as government meteorologists fear it might.
Also, the Coast Guard and Louisiana environmental regulators are continuing to respond to and investigate dozens of oil pollution reports that came in after the storm inundated large sections of Plaquemines Parish. Officials have yet to ascertain whether the contamination is new or leftover oil from the 2010 Macondo well spill.
In its most recent update, the Bureau of Safety and Environmental Enforcement (BSEE) estimated that 18 platforms -- or just 3 percent of the Gulf's total -- remain fully evacuated. Agency representatives report that just one offshore drilling rig remains evacuated and offline.
At the peak of the pre-storm evacuation, some 94 percent of the Gulf's oil production was shut down. Most natural gas output was left offline, as well.
But energy commodities traders seem to have mainly shrugged off the storm's impact, a possible sign that expanding onshore oil and gas production in the United States is lessening the impact on oil prices that past hurricanes and tropical storms have brought. Trading in crude oil futures contracts was mainly flat during the storm's pass over the heart of U.S. offshore energy production, while natural gas prices rose only slightly.
Crude oil production is at about half what it was prior to the storm. BSEE reports that more than 680,000 barrels per day worth of oil output remains shut in, but that figure is expected to shrink rapidly now that almost all the Gulf's working platforms are remanned and companies move quickly to end the downtime.
"Oil and gas operators continue to assess their facilities and are submitting damage reports to BSEE as required," the agency said in a release. "Reports continue to indicate mainly minor damage."
Offshore energy companies are busy confirming this to anxious investors.
Rig owner and operator Noble Corp. says none of its equipment sustained any damage. "All seven rigs have redeployed crews and have now recommenced operations," that company reported.
Coastal and shallow-water energy companies also said they weathered the storm largely unscathed. Yesterday, Saratoga Resources Inc. reported that its operations in the area remained shut in largely due to lingering utility outages. Saratoga CEO Thomas Cooke said it has seen minimal damage as a result of the storm and is using the forced downtime to perform necessary maintenance work that would have otherwise required some planned shut-ins.
"Just as we saw with Hurricane Katrina in 2005 and the twin hurricanes of Gustav and Ike in 2008, our assets fared exceedingly well in withstanding Hurricane Isaac with minimal damage sustained and the ability to return to production in a very short time," he said.
Shut-ins of some Gulf Coast refining capacity due to the storm and the power outages it caused have led to some pain at the pump for drivers. But energy market analysts said they expect the impact to be minimal, arguing that refiners have more than enough spare capacity elsewhere to offset what was lost in coastal Louisiana and Mississippi. Prices for West Texas Intermediate crude oil futures are hovering at around $96 per barrel.
Post-storm pollution concerns, however, seem to be growing.
The Coast Guard now says it is busy investigating some 90 separate reports of oil pollution throughout the region hit by Isaac's landfall. Most of these incidents are being handled by facility owners, an indication that much of the pollution could be a result of flooding at refining and storage sites, but the Coast Guard said it is working with the Louisiana Department of Environmental Quality to assess six of the sites.
Coast Guard spokesman William Colclough said discovering the sources of the pollution could take weeks.
"The investigation continues, and that should take a few weeks or a few months to determine the cause," he said.
Offshore energy producers are still not completely out of the woods as the official hurricane season continues.
The National Hurricane Center says it is now tracking a low-pressure system centered about 25 miles southeast of Pensacola, Fla. The agency says the system has a 40 percent chance of strengthening into a tropical storm over the next couple of days.
The center said an Air Force Reserve reconnaissance flight may be sent to investigate the storm this afternoon.