Occidental Petroleum is evacuating some of its Gulf of Mexico oil facilities ahead of the anticipated storm Cristobal, Occidental said on Wednesday. The evacuated workers so far will be limited to non-essential workers, and interruptions are not expected, Reuters said, according to Oxy.
Occidental is the fourth largest producer in the deep waters of Gulf of Mexico with 10 facilities there, according to the company's website.
Other oil companies operating in the Gulf of Mexico, including BP, Chevron, Exxon, Hess, Murphy, and Shell, are monitoring the situation but have not decided to remove staff from deepwater platforms.
Cristobal will likely reach landfall around the Gulf of Mexico coast, probably around Louisiana, but not before picking up steam in the waters of the Gulf. Gusts of 65 mph are expected.
The Gulf of Mexico accounts for some 17 percent of U.S. oil production. In 2018, hurricane Michael shut in production of more than 700,000 bpd for a few days. In 2017, total oil industry-production and refining-hit US$200 billion, the highest storm bill in history.
This year there will be fewer evacuations than in years past, even if most operators evacuate staff. The rig count in the Gulf has fallen from over 22 in March, to 20 in April, and then to just 12 in the last week of May. It is the lowest rig count there in a decade.
Some analysts are predicting that after shutting in oil production in the Gulf-whether due to coronavirus outbreaks on platforms or due to slack demand and low prices, it may take years for it all to come back online. Any additional shutdowns caused by the tropical storm will likely exacerbate the issue.
By Julianne Geiger for Oilprice.com
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Julianne Geiger is a veteran editor, writer and researcher for Oilprice.com, and a member of the Creative Professionals Networking Group. More