Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Extensive Ida storm damage hurts oil industry recovery effort

Commodities Sep 01, 2021 06:16PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
3/3 © Reuters. FILE PHOTO: A parking sign lies in the street as Hurricane Ida makes landfall in Louisiana, in New Orleans, Louisiana, U.S. August 29, 2021. REUTERS/Marco Bello/File Photo 2/3

By Devika Krishna Kumar and Liz Hampton

PORT FOURCHON, Louisiana (Reuters) -Energy companies on Wednesday scrambled to open new offshore supply operations and restart pipelines and platforms, days after Hurricane Ida slammed the U.S. Gulf Coast, executives said.

Oil refineries, however, could take weeks to restart while utilities work to restore power and supply water, they said.

Damaged roads, power and transport facilities slowed efforts to complete aerial surveys of offshore platforms and pipelines three days after the storm tore through the Gulf of Mexico. The surveys are first step to returning about 80% of the region's oil output halted by the storm.

Hurricane Ida's 150-mile-per-hour (240 km per hour) winds pummeled Port Fourchon, Galliano and Houma, Louisiana, home to vital offshore crew transport, fuel and equipment suppliers. The area also is the nexus for pipelines that funnel oil to processing plants.

“The area is completely devastated,” said Tony Odak, chief operating officer of Stone Oil Distributor, a top supplier of fuel to the offshore industry. “You have infrastructure that needs to be rebuilt.”

RESUPPLY OPERATIONS HIT

Royal Dutch Shell (LON:RDSa) said it was working to establish a new heliport to move crews after a facility in Houma suffered significant damage. Other oil companies were looking to move operations in southeast Louisiana to ports elsewhere in the state or to Texas.

Some 1.4 million barrels of oil and 1.88 billion cubic feet of natural gas remained offline, the offshore regulator said. Oil companies were slow to return offshore workers with 39 of the 288 platforms evacuated last week getting crews by Wednesday.

Stone Oil, which provides diesel and other fuels to offshore providers, has yet to be able to assess its coastal facilities. It will temporarily shift some operations to Cameron, Louisiana, Odak said, but is committed to rebuilding in Port Fourchon.

Port Fourchon was swamped by a 12- to 14-foot storm surge, and recorded a wind gust of up to 190 mph, a port official estimated. The U.S. Coast Guard expect to reopen the port after safety checks are completed.

"We're not talking about weeks, we're talking about days," said Coast Guard Capt. Will Watson.

Mfon Usoro, a senior energy analyst at Wood Mackenzie, estimated it would take two or more weeks to fully restore operations offshore because of the severity of the damages. Port Fourchon "unfortunately took a direct hit on Sunday," she said.

HIGH ECONOMIC LOSSES

Ida's economic cost could hit $70 billion to $80 billion, estimated AccuWeather, with much of the losses stemming from the oil industry and supply chain delays.

Loss of power and mobile phone service stalled companies from reaching workers needed to assess damage at pipelines and refineries. Nearly 1 million Louisiana homes and businesses remained without power on Wednesday.

Some 1.7 million barrels of daily oil processing, or 9% of the U.S. total, was offline at seven Louisiana refineries, the U.S. Department of Energy said. Consultancy Rystad Energy forecast losses will continue for seven to 14 days, depending on flood damage.

Restarting plants will depend on how quickly outside power is restored, with some plants expected to remain offline for four weeks.

Crude oil prices were mixed on Wednesday after OPEC agreed to continue gradual production increases. U.S. crude prices are expected to remain under pressure from refinery outages.

PORTS REMAIN CLOSED

With ports around New Orleans still closed to vessel traffic, more than two dozen oil vessels were moored off Louisiana waiting to load or unload.

The U.S. Coast Guard said it dispatched a cutter to a damaged Noble Corporation drill ship off the coast of Louisiana and heading to port for repairs. The vessel had been caught in the storm and was operating under its own power, the company said.

Energy pipelines were out of service due to power outages or lack of supply coming from offshore. Poseidon Oil Pipeline, which brings oil from offshore platforms to Houma, said on Wednesday it could not answer questions about operations.

Extensive Ida storm damage hurts oil industry recovery effort
 

Related Articles

Oil steady as fuel stocks counter supply concerns
Oil steady as fuel stocks counter supply concerns By Reuters - Jun 30, 2022

By Noah Browning LONDON (Reuters) -Oil prices were largely steady in volatile trading on Thursday as the market weighed concerns over global supply against a build in U.S. fuel...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
Comments (1)
Larry Layton
Larry Layton Sep 01, 2021 6:31PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
"Crude oil prices were mixed on Wednesday after OPEC agreed to continue gradual production increases. U.S. crude prices are expected to remain under pressure from refinery outages." always gotta  skew  the report to bash crude prices  funny you forget the 1.7 million lost barrels of production hurricane Larry on the way
JonMichael Patrick
JonMichael Patrick Sep 01, 2021 6:31PM ET
Saved. See Saved Items.
This comment has already been saved in your Saved Items
nah 2 million coming to replace those.... red dead down to 60
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email