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UPDATE 4-Extensive Ida storm damage 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

* Oil companies shifting resupply centers after major losses
(New throughout, adds details and updates restart efforts)

By Devika Krishna Kumar and Liz Hampton

PORT FOURCHON, Louisiana, Sept 1 (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 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.
(Reporting by Marianna Parraga, Erwin Seba, Sabrina Valle and
Liz Hampton; Writing by Gary McWilliams; Editing by David
Gregorio and Lisa Shumaker)

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