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UPDATE 2-Extensive damage from storm Ida hurts oil industry recovery effort

Wed, 01st Sep 2021 14:38

* Storm left coastal roads, docks, ports in poor condition

* Lack of access impeding assessments, repairs to oil
facilities

*
(Updates with oil prices,)

By Devika Krishna Kumar and Liz Hampton

PORT FOUCHON, Louisiana, Sept 1 (Reuters) - Energy companies
are having a hard time getting workers and supplies to offshore
production platforms and refineries to make repairs after
Hurricane Ida due to extensive storm damage to onshore
infrastructure, executives said.

Some firms are still early in assessing damage from Ida,
three days after the storm 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 offshore oil production is
offline, and damage around transportation and support hubs,
including Houma and Port Fourchon, could slow efforts to restore
production.

Shell said the storm inflicted "significant damage"
to a heliport in Houma, Louisiana, used to transport workers to
offshore platforms, and said it must establish a new facility
before returning workers to production sites.

OFFSHORE HUB DAMAGED

Offshore oil producers returned staff to only 10 platforms
and two drilling rigs over Monday and Tuesday. Platforms run by
BP PLC, BHP Group, Chevron Corp, Royal
Dutch Shell and Occidental Petroleum Corp were
evacuated last week. Offshore facilities in the region
contribute 16% of U.S. production.

Port Fourchon, a supply base for offshore energy companies,
suffered extensive damage and the main road was not passable on
Tuesday. Officials were limiting access to emergency vehicles,
saying it could be weeks before roads are fully passable.

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, limiting efforts to restore
operations at refineries. Nearly 1 million Louisiana homes and
businesses remained without power on Wednesday.

Crude oil prices fell more than $1 per barrel,
reflecting a buildup in U.S. inventories and expectations that
storm-cutbacks at refineries would reduce demand.

ECONOMIC LOSSES HIGH

Some 1.7 million barrels of daily oil processing is 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.

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 9% of U.S. refining
capacity.

Power outages in some areas may persist 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 stemming from the
oil industry and supply chain delays.

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

Energy pipelines that supply export ports and processing
plants were knocked out. Kinder Morgan said it had not
been able to access many of its terminals in Louisiana due to
flooding and road closures. Poseidon Oil Pipeline, which brings
oil from offshore platforms to Houma, said on Wednesday it could
not answer questions about its operations.
(Reporting by Marianna Parraga, Erwin Seba, Sabrina Valle and
Liz Hampton; Writing by Gary McWilliams; Editing by Sonya
Hepinstall, Christopher Cushing, Emelia Sithole-Matarise and
David Gregorio)

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