Massive Storm Ida Damage Hards Oil Industry Recovery Efforts


  • The storm left coastal roads, docks and ports in poor condition
  • Lack of access prevents assessments and repairs of oil facilities
  • Oil companies move resupply centers after major losses

PORT FOURCHON, Louisiana, September 1 (Reuters) – Energy companies rushed on Wednesday to open new offshore supply operations and restart pipelines and platforms, days after Hurricane Ida hit the U.S. coast Gulf of Mexico, officials said.

However, oil refineries could take weeks to restart as utilities scramble to restore electricity and provide water, they said.

Damaged roads, electrical and transportation facilities slowed efforts to complete aerial surveys of offshore platforms and pipelines three days after the storm ravaged the Gulf of Mexico. The surveys are the first step in restoring about 80% of the oil production in the region interrupted by the storm.

Hurricane Ida’s 240 km / h winds hit Port Fourchon, Galliano and Houma, Louisiana, which are home to vital providers of crew, fuel and equipment transport. The region is also a crossroads for pipelines that bring oil to processing plants.

“The region is completely devastated,” said Tony Odak, COO of Stone Oil Distributor, a major fuel supplier to the offshore industry. “You have an infrastructure that needs to be rebuilt. “

ESCAPED SUPPLY OPERATIONS

Royal Dutch Shell (RDSa.L) said it was working on the creation of a new helipad to move crews after a facility in Houma suffered significant damage. Other oil companies were looking to move their operations in southeast Louisiana to ports elsewhere in the state or to Texas. Read more

Some 1.4 million barrels of oil and 1.88 billion cubic feet of natural gas have remained offline, the offshore regulator said. Oil companies were slow to fire the workers offshore, with 39 of the 288 rigs evacuated last week having crews on Wednesday. Read more

Stone Oil, which supplies diesel and other fuels to offshore suppliers, has not yet been able to assess its coastal facilities. It will temporarily move some operations to Cameron, Louisiana, Odak said, but has pledged to rebuild in Port Fourchon.

Port Fourchon was submerged by a 12- to 14-foot storm surge and recorded a gust of wind of up to 190 mph, a port official estimated. The US Coast Guard plans to reopen the port once security checks are completed.

“We are not talking about weeks, we are talking about days,” said Coast Guard Captain Will Watson.

Mfon Usoro, senior energy analyst at Wood Mackenzie, estimated that it would take two weeks or more to fully restore offshore operations due to the severity of the damage. Port Fourchon “unfortunately took a direct hit on Sunday,” she said.

HIGH ECONOMIC LOSSES

Ida’s economic cost could reach $ 70 billion to $ 80 billion, AccuWeather estimated, with much of the loss coming from the oil industry and supply chain delays.

The blackout and cell phone service prevented companies from reaching the workers needed to assess the damage to pipelines and refineries. Nearly a million homes and businesses in Louisiana went without power on Wednesday.

Some 1.7 million barrels of oil processing per day, or 9% of the U.S. total, were offline at seven refineries in Louisiana, the U.S. Department of Energy said. The losses predicted by consultancy Rystad Energy will continue for seven to 14 days, depending on the damage caused by the floods.

Restarting the plants will depend on how quickly outside electricity is restored, with some plants expected to remain offline for four weeks.

Crude oil prices were mixed on Wednesday after OPEC agreed to continue gradual increases in production. US crude prices are expected to remain under pressure from refinery shutdowns. Read more

PORTS REMAIN CLOSED

With ports around New Orleans still closed to maritime traffic, more than two dozen oil tankers were moored off Louisiana awaiting loading or unloading. Read more

The US Coast Guard said it sent a cutter to a damaged Noble Corporation drillship off the coast of Louisiana and headed for the port for repairs. The ship had been caught in the storm and was operating on its own, the company said.

Power pipelines were out of service due to power outages or a lack of supply from offshore. The Poseidon pipeline, which carries oil from offshore platforms to Houma, said Wednesday it could not answer questions about the operations.

Reporting by Marianna Parraga, Erwin Seba, Sabrina Valle and Liz Hampton; Writing by Gary McWilliams; Editing by David Gregorio and Lisa Shumaker

Our Standards: Thomson Reuters Trust Principles.

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