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UPDATE 1-Infrastructure damage stifles oil recovery efforts after Hurricane Ida

Wed, 01st Sep 2021 14:38

(Adds details on power outages, updates from Shell)

By Devika Krishna Kumar and Liz Hampton

PORT FOUCHON, Louisiana, Sept 1 (Reuters) - Energy
companies' efforts to get workers back to offshore production
platforms and refineries to make repairs after Hurricane Ida
lashed Louisiana are being stymied by the extent of onshore
infrastructure damage from the storm, executives said.

Energy companies are still trying to assess the damage from
the storm, which tore through the U.S. Gulf of Mexico, pushing
several feet of water into coastal plants and toppling
transmission towers inland. Its 150-mile-per-hour (240 kph)
winds were the strongest since Laura hit the state a year ago.

Roughly 1.7 million barrels of daily oil production is
offline at offshore platforms, and damage to transportation hubs
and support locales such as Port Fourchon, which serves offshore
facilities, could keep output offline longer than originally
anticipated.

Shell said its crew-change heliport in Houma,
Louisiana, used to supply workers to offshore platforms,
sustained "significant damage" as a result of the storm and that
it would halt crew changes to and from its sites until a
temporary heliport is established.

Offshore oil producers returned staff to only 10 platforms
and two drilling rigs over Monday and Tuesday.

About 1.7 million barrels of output is shut, according to
U.S. offshore regulator Bureau of Safety and Environmental
Enforcement. Platforms run by BP PLC, BHP Group,
Chevron Corp, Royal Dutch Shell and Occidental
Petroleum Corp - which contribute to the 16% of U.S.
production from offshore facilities - were all evacuated.

Port Fourchon, a base of operations for U.S. Gulf offshore
output, suffered extensive damage and some of the roads are
still not passable. Officials on Tuesday were only allowing
emergency responders through to the port, adding it could be
weeks before the roads are fully passable.

SLOW POWER RESTORATION

The loss of power and mobile phone service has prevented
companies from reaching workers needed to conduct damage
assessments. Swamped coastal roads and wind-damaged docks also
hampered securing workers and supplies, the executives said.

Power restoration has been slow so far. More than 770,000
Louisiana customers of utility company Entergy Corp were still
without power on Wednesday, down only slightly from Tuesday,
according to the company's web site.

Some areas of the state may not have power for up to six
weeks. Full recovery of processing capacity will depend on how
quickly outside power is restored, with some plants taking four
weeks to recover.

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

Port delays had more than two dozen oil vessels moored off
Louisiana waiting to load or unload, with the largest
bottlenecks near Baton Rouge and Lake Charles.

Colonial Pipeline Co began sending gasoline and
diesel to East Coast motorists after a storm shutdown. And on
Tuesday Exxon said it was beginning to restart operations at its
Baton Rouge refining and chemical complex.

But that left about 2 million barrels of oil processing at
other refineries still offline, estimated consultancy Rystad
Energy. It forecast affected plants will remain offline for
seven to 14 days, depending on the extent of flood damage.

Gulf Coast refiners Exxon Mobil Corp, PBF Energy Inc
and Royal Dutch Shell PLC halted oil processing at
plants in the storm's path, cutting about 13% of U.S. refining
capacity.
(Reporting by Marianna Parraga, Erwin Seba, Sabrina Valle and
Liz Hampton; Writing by Gary McWilliams; Editing by Sonya
Hepinstall, Christopher Cushing and Emelia Sithole-Matarise)

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