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Storm Warnings Force Shell To Withdraw Offshore Staff From The Gulf

Storm Warnings Force Shell To Withdraw Offshore Staff From The Gulf

Royal Dutch Shell announced on June 14 that it was removing some of its workers from its offshore oil platforms in the Gulf of Mexico due to a brewing storm there.

Shell says it is evacuating all non-essential personnel as the storm moves into the region. The storm has an 80 percent chance of becoming a tropical storm within the next two days. Related: Oil Prices Responding Positively To Bad News, But Why?

It does not appear at the moment that the move will affect production from Shell’s rigs.

The National Hurricane Center is actually predicting a much quieter year for the Gulf Coast in terms of hurricanes. An El Niño is forming in the Pacific, which tends to reduce the frequency of hurricanes that form in the Atlantic Ocean.

Still, the Gulf of Mexico is the largest source of American oil after the state of Texas. And the Gulf is no stranger to severe storms. Related: Kurdish Oil Exports Under Threat

In 2008, Hurricane Gustav and Hurricane Ike struck the coast near Galveston, TX, a major energy hub. The combined storms forced an average of 1.1 million barrels per day to be shut down during the month of September. In 2012, Hurricane Isaac forced the closure of 1.3 million barrels of crude oil per day, along with 3 million cubic feet of natural gas per day, 0.9 million barrels of refinery capacity per day, and 1.5 million barrels of pipeline capacity.

And of course, Hurricane Katrina and Rita in 2005 also inflicted a devastating toll. Along with the massive human casualties and extensive damage to cities and infrastructure, the storms also cut off the equivalent of about 8 percent of the country’s energy production, leading to a spike in prices. The U.S. and nations belonging to the International Energy Agency released stockpiles from their strategic petroleum reserves in response. Related: Forget Asia. US Natural Gas To Be Exported To Mexico

The latest storm is not expected to grow into anything even remotely as serious, but Shell’s evacuation of its staff is a reminder of the dangers of severe weather in the Gulf. Other oil companies in the region are also keeping an eye on the latest developments.

By Charles Kennedy of Oilprice.com

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