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UPDATE 1-Infrastructure damage stifles oil recovery efforts after Hurricane Ida

reuters.com · 09/01/2021 09:38
UPDATE 1-Infrastructure damage stifles oil recovery efforts after Hurricane Ida

Adds details on power outages, updates from Shell

By Devika Krishna Kumar and Liz Hampton

- Energy companies' efforts to get workers back to offshore production platforms and refineries to make repairs after Hurricane Ida lashed Louisiana are being stymied by the extent of onshore infrastructure damage from the storm, executives said.

Energy companies are still trying to assess the damage from the storm, which tore through the U.S. Gulf of Mexico, pushing several feet of water into coastal plants and toppling transmission towers inland. Its 150-mile-per-hour (240 kph) winds were the strongest since Laura hit the state a year ago.

Roughly 1.7 million barrels of daily oil production is offline at offshore platforms, and damage to transportation hubs and support locales such as Port Fourchon, which serves offshore facilities, could keep output offline longer than originally anticipated.

Shell RDS A said its crew-change heliport in Houma, Louisiana, used to supply workers to offshore platforms, sustained "significant damage" as a result of the storm and that it would halt crew changes to and from its sites until a temporary heliport is established.nL1N2Q30VU

Offshore oil producers returned staff to only 10 platforms and two drilling rigs over Monday and Tuesday.

About 1.7 million barrels of output is shut, according to U.S. offshore regulator Bureau of Safety and Environmental Enforcement. Platforms run by BP PLC BP, BHP Group BHP, Chevron Corp CVX, Royal Dutch Shell RDS A and Occidental Petroleum Corp OXY - which contribute to the 16% of U.S. production from offshore facilities - were all evacuated.

Port Fourchon, a base of operations for U.S. Gulf offshore output, suffered extensive damage and some of the roads are still not passable. Officials on Tuesday were only allowing emergency responders through to the port, adding it could be weeks before the roads are fully passable.


SLOW POWER RESTORATION

The loss of power and mobile phone service has prevented companies from reaching workers needed to conduct damage assessments. Swamped coastal roads and wind-damaged docks also hampered securing workers and supplies, the executives said.

Power restoration has been slow so far. More than 770,000 Louisiana customers of utility company Entergy Corp were still without power on Wednesday, down only slightly from Tuesday, according to the company's web site.

Some areas of the state may not have power for up to six weeks. Full recovery of processing capacity will depend on how quickly outside power is restored, with some plants taking four weeks to recover.

Ida's economic cost could hit $70 billion to $80 billion, estimated AccuWeather, with much of the losses due to the impact on the oil industry and supply chain delays.

Port delays had more than two dozen oil vessels moored off Louisiana waiting to load or unload, with the largest bottlenecks near Baton Rouge and Lake Charles. nL1N2Q226D

Colonial Pipeline Co COLPI.UL began sending gasoline and diesel to East Coast motorists after a storm shutdown. And on Tuesday Exxon said it was beginning to restart operations at its Baton Rouge refining and chemical complex.

But that left about 2 million barrels of oil processing at other refineries still offline, estimated consultancy Rystad Energy. It forecast affected plants will remain offline for seven to 14 days, depending on the extent of flood damage.

Gulf Coast refiners Exxon Mobil Corp XOM, PBF Energy Inc PBF and Royal Dutch Shell PLC halted oil processing at plants in the storm's path, cutting about 13% of U.S. refining capacity.


(Reporting by Marianna Parraga, Erwin Seba, Sabrina Valle and Liz Hampton; Writing by Gary McWilliams; Editing by Sonya Hepinstall, Christopher Cushing and Emelia Sithole-Matarise)

((Gary.McWilliams@thomsonreuters.com; +1 469-691-7668;))