UPDATE 3-US offshore oil producers brace for Storm Isaac

Sat Aug 25, 2012 3:15am IST

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Stocks

   

* BP shutting Thunder Horse, world's largest offshore platform

* Storm could threaten most energy-heavy part of the Gulf of Mexico

* Shell evacuating some workers from east central Gulf operations

By Kristen Hays

HOUSTON, Aug 24 (Reuters) - Oil and gas producers in the Gulf of Mexico started preparing for Tropical Storm Isaac on Friday as its track looked to skirt the heart of the U.S. offshore energy producing zone.

London-based BP Plc, the biggest U.S. Gulf producer, said it would shut down its giant Thunder Horse platform, the world's largest.

Royal Dutch Shell and Apache Corp said they would evacuate some workers from their Gulf platforms with no production impacts. Other offshore drillers were likely to shut production in coming days as the storm approaches.

Isaac is on a path that will take it over Haiti and Cuba before entering the Gulf of Mexico late on Sunday or early Monday as a tropical storm. Isaac is expected to strengthen into a weak Category One hurricane by Tuesday before plowing into the west Florida Panhandle on Wednesday, according to the U.S. National Hurricane Center.

If Isaac stays on the track projected by U.S. forecasters, it will skirt the eastern edge of the U.S. offshore production area, which accounts for 23 percent of U.S. oil and 7 percent of its natural gas output.

However, oil traders said that a westward shift in Isaac's track could bring it into the heart of the offshore oil patch and spur significant supply disruptions.

A westward shift makes precautionary production shutdowns more likely and could also affect refining and other energy infrastructure along the U.S. Gulf Coast, J.P. Morgan said in a note on Friday.

Forecasters at Weather Insight, an arm of Thomson Reuters, still give the storm a 50 percent chance of entering the heart of the oil and gas producing region.

Thunder Horse is in the Mississippi Canyon area of the Gulf straight south of Louisiana. That area, along with Green Canyon to its southwest, are home to the bulk of the basin's energy infrastructure.

"We have begun evacuating all workers from our Thunder Horse platform in the eastern Gulf and will temporarily suspend oil and natural gas production there," BP said in a statement.

BP's Thunder Horse is designed to produce up to 250,000 barrels per day of oil and 200 million cubic feet per day of natural gas.

BP, the largest oil producer in the Gulf that operates seven oil and gas platforms, also was evacuating non-essential workers from three installations in the Mississippi Canyon area -- Na Kika, Horn Mountain and Marlin.

Na Kika can produce up to 130,000 bpd of oil and 500 mmcf per day of gas. Horn Mountain and Marlin, which are among smaller Gulf assets BP is seeking to sell to focus on larger fields like Thunder Horse and Na Kika, can produce, respectively, up to 65,000 bpd oil and 68 mmcf per day of gas, and 60,000 bpd oil and 250 mmcf per day of gas.

Non-essential workers are those not directly involved in oil and gas output, such as cooks and cleaning staff.

Royal Dutch Shell, the third-largest oil producer in the basin behind BP and Chevron Corp, said on Friday it was preparing to evacuate non-essential workers from its platforms in the eastern-central part of the Gulf. While the company suspended drilling operations at some of its assets in those areas, no production had been shut down, the company said.

Apache Corp was also evacuating non-essential workers from its east-central Gulf operations in shallow waters, as was Murphy Oil Corp from its three oil and gas platforms. Production remained normal for both companies.

Shell did not specify which platforms were being partially evacuated, but the company has three installations in the Mississippi Canyon area.

Those are Mars, with capacity to produce up to 160,000 bpd of oil and 121 mmcf of gas per day; Ursa, with 150,000 bpd oil and 400 mmcf gas per day capacity; and Brutus, with 100,000 bpd oil and 150 mmcf gas per day.

Williams Cos, which operates pipelines that deliver oil and gas from Chevron Corp's Blind Faith platform and ENI's Devil's Tower platform, said on Friday that those facilities were expected to be evacuated and shut Sunday or Monday. Williams said they were being secured on Friday.

Chevron said on Friday it was evacuating some non-essential workers from "some offshore facilities," but did not specify which ones.

Blind Faith can produce up to 65,000 bpd of oil and 55 mmcf per day of gas, while Devil's Tower can produce up to 60,000 bpd of oil and 110 mmcf per day of gas.

Other companies, including BHP Billiton, said they were monitoring the storm. Operations were normal on Friday at the Louisiana Offshore Oil Port, the only U.S. port capable of offloading foreign crude from giant tankers.

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