GOM Oil And Gas Production Rebounds After Michael

Oil and gas production in the Gulf of Mexico has started recovering after hurricane Michael, the Bureau of Safety and Environmental Enforcement said. With evacuated personnel now back to all 687 manned platforms in the Gulf, the production decline that followed the hurricane’s passage through the area is beginning to be reversed.

Still, the BSEE said, 15.8 percent of oil production capacity remains shut in for the time being. That’s equal to 268,824 bpd. In natural gas, 8.9 percent of capacity remains shut in, equal to 227 million cu ft per day.

The hurricane shut in more than 40 percent of oil production capacity in the Gulf of Mexico, according to data from the BSEE from last week, as well as almost 32 percent of gas production capacity.

A total of 89 platforms were evacuated by the time Michael made landfall last Wednesday in Florida, as well as seven drilling rigs, with shut-in production totaling almost 718,900 bpd. Some 813 million cubic feet of natural gas production has also been taken offline this week.

Despite the high portion of shut-in capacity in the Gulf, the developments did not have a significant effect on prices: most of U.S. production comes from onshore reserves, so the 40 percent of GOM capacity not producing last week represents just 6 percent of the total national production capacity.

Also, it was clear from the start the shut-in would be temporary, so there was no time for traders to start worrying about a possible supply shortage in the wake of the hurricane, which has become the third-strongest storm in U.S. history.

As of this Sunday, more than 435,000 people and households across seven states were without power, CNN reports, and 30-35 are still unaccounted for in the area of Mexico Beach, the part of Florida that suffered the greatest damage from the storm.

By Irina Slav for Oilprice.com

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