Houston — Shell, BP other top producers in the US Gulf of Mexico are beginning to resume drilling operations and bring production volumes back online now that Tropical Depression Cristobal is onshore and most deepwater oil and gas facilities were left unscathed.
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While Shell never took any oil and gas volumes offline during the storm, BP, Occidental Petroleum and others shut some production volumes as the Gulf temporarily lost about 35% of its crude and natural gas volumes, according to the US Bureau of Safety and Environmental Enforcement.
Some crude production slowly began returning on June 8 as BSEE reduced its shut-in estimate from 635,781 b/d down to 629,351 b/d. However, more natural gas was still shut as BSEE increased its estimate from 878 MMcf/d to 952 MMcf/d.
Ahead of Cristobal's move onshore, BSEE said, operators evacuated 188 platforms and rigs in the Gulf -- roughly 30% of the US Gulf's total platforms with working personnel -- and relocated several drillships.
BP, for instance, had reduced outputs at its Thunder Horse, Atlantis and Na Kika platforms in the Gulf. Those three BP-operated platforms churn out more than 200,000 boe/d. BP's Mad Dog platform wasn't affected.
"BP has started to resume normal operations at its four operated platforms in the deepwater Gulf of Mexico," BP said in a June 8 statement.
Shell said June 8 that it will begin redeploying nonessential workers who were evacuated from offshore platforms as Shell resumes operations.
"There were no impacts to our production as a result of TS Cristobal, and we expect to resume our drilling operations as conditions continue to improve today and tomorrow," Shell said in a prepared statement.
A Murphy Oil spokesman said the oil producer was working to return crews to their offshore locations. And ExxonMobil said its offshore facilities and USGC refineries are all operating normally.
Cristobal battered southern Mexico and shut down ports over the past week, before moving through the Gulf and spreading heavy rainfall from Louisiana to Florida. The storm hit just as oil prices were moving up with the OPEC+ group agreeing to extend deeper production cuts at least through July and front-month NYMEX WTI flirting with hitting $40/b for the first time since early March.
Total Gulf oil production was nearly 2 million b/d before the coronavirus pandemic cratered global demand and oil prices. BSEE was estimating Gulf oil production at closer to 1.85 million b/d before Cristobal.
However, S&P Global Platts Analytics data estimates that Gulf crude oil production will fall to an estimated 1.62 million b/d average for June as some producers reduced their volumes because of lower prices.
After Cristobal passes, offshore oil and gas facilities will be inspected and, once the standard checks are completed, production from undamaged facilities will be brought back online immediately, BSEE said. Facilities sustaining damage may take longer to bring back online.
The last major hurricane to significantly interrupt production from the US Gulf of Mexico was Barry, which made landfall last July. Barry caused the shut-in of close to 1.4 million b/d of crude oil, about 73% of the US Gulf crude output, according to BSEE. On a monthly basis, Barry caused US Gulf production to dip by about 330,000 b/d for the month.
As of June 8, US offshore gas production was estimated at 1.7 Bcf/d where it has remained over the past several days following the evacuation of personnel from nearly 30% of Gulf of Mexico platforms. In the 30 days prior, modeled production had averaged nearly 2.5 Bcf/d, S&P Global Platts Analytics data shows.
Louisiana offshore production remains the hardest hit, with sample receipts down about 620 MMcf/d. Receipts from the Alabama offshore are down about 130 MMcf/d over the same period. Mississippi's offshore sample, which had initially remained stable, was down about 60 MMcf/d on June 8, compared to pre-storm averages. Platts Analytics expects gas production from facilities not damaged by the storm to begin returning over the next several days.
Despite some port closures and restrictions from Louisiana to Alabama, refining and LNG facilities along the US Gulf Coast maintained their operations during the storm.
And port activity along the USGC began reopening June 8 as all Houma, Louisiana ports returned to normal, although the Port of New Orleans remained closed.
In Mississippi, vessel traffic at the Port of Pascagoula, which serves Chevron's 336,440 b/d refinery, remained restricted.
A US Coast Guard flyover the Mississippi River was postponed to later June 8 due to bad weather, but pilots associations are ready to return to work once given the all clear from the Coast Guard.
In Mexico, Pemex had to close production at some of its wells in the area stroke by storms Amanda and Cristobal during 10 working days between May and June, CEO Octavio Romero said during a press conference June 7.
Romero did not mention how many wells were affected or where they are located. Amanda hit Mexico on May 31 passing through the states of Campeche, Chiapas, Oaxaca, Tabasco and Veracruz. Only Chiapas does not have oil or gas infrastructure from Pemex.
Pemex April production was 1.671 million b/d, according to official data. May's output was down 8.6% to 1.527 million b/d according to a tweet by one of the five commissioners at the National Hydrocarbons Commission, the sector regulator. Official May data will be published at the end of June.
A Pemex spokesperson did not reply to requests for comments.
Ports in the coastal states of the Gulf of Mexico resumed operations for major ships on June 7 after three days of closure, according to the Communications and Transport Secretariat.
Activities for minor ships resumed June 8, the agency said.