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Oil company evacuations intensify as Gustav churns toward Gulf of Mexico |
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Written by John Porretto, THE ASSOCIATED PRESS
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Thursday, 28 August 2008 |
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HOUSTON - Oil companies and drilling contractors on Thursday accelerated the evacuation of thousands of workers and secured offshore rigs and other equipment in the Gulf of Mexico as tropical storm Gustav churned toward the United States.
With top sustained winds just below hurricane strength, Gustav was projected to become a major Category 3 hurricane after it passes between Cuba and Mexico and enters the warm, deep Gulf waters. Some models showed Gustav taking a path toward Louisiana and other Gulf states devastated by hurricanes Katrina and Rita three years ago.
Vast areas of the Gulf lost power when Katrina struck, and utility companies say they're better prepared to respond to violent weather, but that only so much can be done.
Gustav is forecast to slam into the Gulf Coast early next week.
Hundreds of workers were being pulled out of the Gulf Thursday, and oil companies prepared to stop production, if necessary. About 35,000 people work in the Gulf, staffing offshore rigs and production facilities, among other tasks, according to the U.S. Minerals Management Service.
Royal Dutch Shell PLC planned to have another 300 workers out of the area, after removing 400 on Wednesday. The oil giant said it expected to remove its remaining 600 workers Friday and Saturday. BP PLC said it was completing the evacuation of non-essential platform personnel.
ConocoPhillips closed its only Gulf platform.
Shell also said it had begun to shut-in production at some wells, a process that can take several days. Anadarko Petroleum Corp., the largest independent deep-water producer in the Gulf of Mexico, was preparing to do the same.
Spokesman John Christiansen said the process entails removing the oil or natural gas from the piping that extends from the seafloor to the production platform, then sealing off the hole.
"Everything is shut off with valves at the seafloor so if there's any damage to the facility itself, the oil or natural gas - whatever's being produced - stays underground and doesn't get out into the environment," he said.
Anadarko said it expects to evacuate its eight production platforms in the Gulf of some 600 employees and contractors and have its production shut in by Sunday.
Transocean Inc., the world's largest offshore drilling contractor, said Thursday it had pulled about 190 workers from five of its 11 offshore drilling rigs in the Gulf. Transocean has 1,550 workers in the region.
Apache Corp. said it planned to move non-essential personnel from its production facilities in the Gulf on Thursday and Friday. Exxon Mobil Corp. said it was identifying which workers to pull out ahead of the storm.
Along the Gulf coast, refiners made early preparations for possible shutdowns.
San Antonio-based Valero Energy Corp. said that because of projected storm paths, it was paying particular attention to its refinery in Port Arthur, Texas, and another refinery just outside New Orleans at Norco, La.
Emergency supplies were being obtained for all of Valero's coastal refineries that also include Houston, Texas City and Corpus Christi, Texas, the company said.
The company took away some lessons from the double punch of Katrina and Rita in 2005, Valero spokesman Bill Day said. Valero put advance contracts in place for extra emergency equipment such as generators.
"Probably the main lesson we learned from Katrina and Rita is to take care of employees, make sure they have a place to stay, food, generators and a place for their families," Day said.
Motiva Enterprises LLC, a partnership between Shell and Saudi Arabia's national petroleum company, delivered extra gasoline to terminals Thursday in anticipation of huge demand should storm evacuations occur. The company has refineries at Convent and Norco in Louisiana and Port Arthur.
A refinery shutdown is not an instant stop-and-start process. Motiva said that even without storm damage, restarting production could take anywhere from a day to week. The company said it was impossible to predict how strong a hurricane would have to be to damage a refinery.
The U.S. Gulf coast is home to nearly half the country's refining capacity, while offshore the Gulf accounts for about 25 per cent of domestic oil production and 15 per cent of natural gas output.
Fears of disruption in energy production already have contributed to a 40 per cent spike in wholesale gasoline prices in recent days, leaving retailers with little choice but to pass on those costs to consumers.
The increase comes as many Americans plan to hit the road for Labour Day weekend.
"It's likely that we'll see a 10 cents per gallon increase in gasoline in Texas and Louisiana prior to the storm's arrival," said Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University.
Major utilities from across the region are holding teleconferences every day, preparing a joint response.
Gulf Power Co., a Southern Co. utility that has 425,000 customers in the Florida panhandle, has put all of its employees on alert and cancelled vacations, said spokesman John Hutchison.
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Associated Press business writers Mark Williams, in Columbus, Ohio, and Alan Sayre, in New Orleans, contributed to this report.
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