Oil and gas field operators in the Gulf of Mexico began to evacuate platform staff and shut in production ahead of Hurricane Michael, which is expected to make landfall in Florida tomorrow. So far, the Bureau of Safety and Environmental Enforcement reported Monday, more than 19 percent of oil and 11.09 percent of gas production capacity in the Gulf of Mexico have been shut in, and more will likely follow ahead of the hurricane.
The shut-in capacity stands at 324,190 bpd of oil production and 283.88 million cu ft of natural gas output. That’s all according to daily reports that field operators send to the BSEE. According to meteorologists, the hurricane is being fed by warmer sea surface temperatures, which could lead to waves of between 15 and 20 feet—enough to disrupt oil and gas production in the Gulf.
Reuters reported Monday that fuel prices in the United States did not react in any strong way to the news of another hurricane threatening oil and gas production, with most traders assuming the effect of Michael would be temporary. The storm is currently moving away from the area with the greatest refinery density, which may have affected this sentiment.
So far, BP has shut down oil and gas production at four platforms, with Anadarko, Chevron, and BHP Billiton shutting in two each. Exxon and Equinor evacuated the personnel from one platform each. The total number of shut-in platforms and rigs as of end of day Monday was 15, including 10 platforms and 5 rigs.
If the hurricane continues up along the East Coast, it could affect refineries, however. S&P Global Platts reports that Michael’s extended path passes by part of the coast that’s home to at least five refineries with a combined production capacity of more than a million barrels of oil daily.
By Irina Slav for Oilprice.com
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