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Nearly 92% of US Gulf of Mexico oil output still shut in after Hurricane Delta's landfall


Producers bringing crews back to platforms

1.697 million b/d remains shut in

Delta leaves 575,000 customers without power

Houston — Nearly 92% of US Gulf of Mexico oil output remained shut in Oct. 10, a day after Hurricane Delta made landfall in Louisiana, as upstream operators began to return crews to producing platforms.

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Offshore producers have now shut in 1.697 million b/d of oil, or 91.7% of the US Gulf's total, up slightly from 1.694 million b/d Oct. 9, the US Bureau of Safety and Environmental Enforcement said in its daily bulletin. Operators have also shut in 1.692 Bcf/d of natural gas, or 62% of the total, up from 1.685 Bcf/d Oct. 9.

In addition, 276 producing platforms remained offline, up from 274 on Oct. 9.

The Oct. 10 figures reflect the reporting of 44 companies, BSEE said.

"The US Gulf had been producing close to 1.8 million b/d of crude pre-Delta," said S&P Global Platts Analytics analyst Sami Yahya. "Given widespread curtailments, volume recovery may take up to two weeks post peak impact, which has likely been reached."

Now a tropical storm, Hurricane Delta made landfall around 6 p.m. local time Oct. 9 at Creole, Louisiana – about 35 miles east of the Texas-Louisiana border – as a Category 2 storm with maximum sustained winds around 100 mph, the National Hurricane Service said.

Delta continues to degrade as it moves further inland.

Producers assessing platforms

At the same time, producers Oct. 10 began to assess conditions offshore and started to return crews to producing platforms, where they will inspect the infrastructure for damages and make needed repairs prior to restoring production.

"As conditions continue to improve today and tomorrow [i.e., Oct. 10-11], we are beginning the process of redeploying personnel to our assets," said Shell, which had shut down nine assets prior to the storm's passage through the US Gulf.

"All of our mobile drilling units are returning to drill sites to restart operations," Shell added.

BHP was also flying crews out to its two operated US Gulf platforms.

"We are in the process of remobilizing at Neptune and Shenzi and we expect to be completed by tomorrow morning [Oct. 11]," BHP spokeswoman Judy Dane said. "Production restart will be dependent on our midstream providers."

Winds had not totally died down in parts of the US Gulf Oct. 10, which impaired some operator preparatory work.

"Winds have to subside before the platforms can be inspected for damage and be declared safe to be re-manned," Al Petrie, a spokesman for W&T Offshore, said. "It will take several days to get that all done."

W&T, one of the few small public independent pure-play US Gulf operators, produced 42,037 boe/d in the second quarter. It does not disclose specific platform shut-ins during storms, Petrie said.

Few refineries at risk

Delta's cone narrowed from earlier in the week, putting fewer area refineries at risk. Of the four Louisiana refineries in Delta's path, only Alon's 80,000 b/d Krotz Springs plant was operating.

Citgo's 418,000 b/d Lake Charles refinery, and Phillips 66's 260,000 b/d Westlake refinery, both remained down because of power outages caused by Hurricane Laura in late August. Hurricane Delta might cause a delay in the return of those two plants. Citgo and Phillips 66 could not be reached for comment.

Hurricane Delta left roughly 575,000 thousand customers without electricity as of late morning Oct. 10, according to

Entergy Louisiana, which serves over a million customers, had over 300,000 customer outages on the morning of Oct. 10, data showed, and regional utility Cleco, serving 288,000 customers in Louisiana, had 124,861 outages, according to an emailed statement.

Entergy did not have any generating plants knocked offline due to the storm, which includes the investor-owned utility's 992-MW River Bend-1 nuclear power plants in Louisiana and the 1.5-GW Grand Gulf-1 plant in Mississippi, spokesman Jerry Nappi said in an email.

The 1.2-GW Waterford-3 nuclear plant located in Louisiana had been previously shut down for a scheduled refueling and maintenance outage, Nappi noted.

"Now that the storm has passed and conditions are improving, damage assessments will begin by land and air, and crews will begin making any necessary system repairs and restoring power," James Lass, Cleco's director of distribution operations and emergency management, said in the statement.

Active hurricane season

Delta was the tenth named storm in what as been the busiest Atlantic hurricane season in years.

The nearly 1.7 million b/d peak oil shut-in figure in the US Gulf represented "the most [production taken offline at one time] since Hurricane Katrina," James West, an analyst with boutique investment bank Evercore ISI observed in an Oct. 9 investor note, referring to a legendary US Gulf storm which battered the New Orleans area in 2005.

Hurricane Delta hit in roughly the same area of far southwestern Louisiana that Hurricane Laura, an even more dangerous storm, had pounded six weeks before.

While it seems "strange" having two hurricanes land in the same area during the same storm season, "it actually has happened 17 times in the US since 1950," West said.

Many analysts are comparing this year's storm season to 2005, when Louisiana was hit by Hurricanes Cindy, Katrina and Rita, West noted. The latter two storms were legendary for their Category 5-intensity – the highest on the five-level Saffir-Simpson Hurricane Wind Scale – and the severity of their damages to life and property.

Rita also was unforgettable for parking-lot traffic created on Houston freeways for dozens of miles heading north and west the day before the storm made landfall, since it been predicted to hit that city before making a last-minute turn to the east. Rita ultimately made landfall 100 miles away from Houston, around Sabine Pass at the Louisiana-Texas state line.

In contrast, Katrina made landfall near the "toe" of Louisiana and devastated New Orleans, 50 miles northwest.