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U.S. oil firms restore operations in storm-tossed Gulf of Mexico


HOUSTON (Reuters) – Major oil producers and drillers, including Exxon Mobil Corp (XOM.N) Chevron Corp (CVX.N) and BP Plc (BP.L), on Thursday began returning workers and restoring output at U.S. Gulf of Mexico facilities shut as Hurricane Michael blew through.

The U.S. offshore safety regulator’s daily update showed that 40 percent of Gulf oil output and 29 percent of natural gas production was locked in, slightly less than a day earlier.

The storm brought heavy seas with up to 20 foot (6 meter) waves and winds of 155 miles per hour (250 kph) in the Gulf on Wednesday as it moved toward the Florida Panhandle. Drenching rains were falling over Georgia and the Carolinas on Thursday.

Oil output was off by 680,000 barrels a day and natural gas production down by 744 million cubic feet a day, according to the Bureau of Safety and Environmental Enforcement (BSEE). Its Thursday survey found workers had returned to 30 of the 89 production platforms unmanned on Wednesday.

Chevron and Exxon each were in the process of returning to normal operations at two production platforms that had evacuated some staff, the companies said. BP also was redeploying crews to four platforms after completing safety checks.

Restarting production can take several days. Producers lost about 2.39 million barrels of oil this week through Thursday as a result of shut-ins and the figure is expected to rise. However, Gulf production cuts have been less of an impact on supplies with the rise of U.S. shale oil.

Almost 850,000 electricity customers in the U.S. Southeast were without power on Thursday, according to utilities, as the storm headed for the Carolinas.

Power outages were delaying fuel deliveries in Georgia to customers of Colonial Pipeline, the country’s largest fuel network, its operator said on Thursday. Colonial said it was assessing damages and working to resume service.

U.S. crude futures LCOc1 continued to drop for second day, losing $1.88 to $71.29 per barrel in midday trade, as global stock markets fell, with investor sentiment made more bearish by a bigger-than-expected U.S. crude inventories build. [O/R]

Anadarko Petroleum Corp (APC.N) said on Thursday it had expanded its shut-ins to three offshore platforms, and for safety reasons was waiting to return workers.

Gas production should move up to 2.3 billion cubic feet per day (bcfd) on Thursday from a low of 2.2 bcfd on Tuesday, according to Refinitiv data. A week ago, energy firms were pulling 3.5 bcfd from offshore wells.

Reporting by Gary McWilliams in Houston, Scott DiSavino and Stephanie Kelly in New York; Editing by Marguerita Choy and Grant McCool



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