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US Gulf of Mexico oil production inches up despite hampered offshore transportation

Highlights

1.7 million b/d of oil output still offline: BSEE

2 Bcf/d of natural gas output also shut-in

Titan US Gulf platform appears 'intact': Equinor

Four days after Hurricane Ida slammed the Louisiana coast, output in the US Gulf of Mexico is inching up even though damaged road and transport infrastructure has delayed producers' ability to get out and inspect their platforms.

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On Sept. 2, 1.702 million b/d of crude remained shut-in, about 93.5% of the US Gulf's roughly 1.8 million b/d of total pre-storm oil output, according to the US Bureau of Safety and Environmental Enforcement.

That compares to 1.705 million b/d of crude oil shut-in as of Aug. 31, or 93.7%.

In addition, 2.0 Bcf/d of natural gas was shut in Sept. 2, or 91.3% of the US Gulf's roughly 2.2 Bcf/d of pre-storm output. That compares to 94.5% shut-in on Aug. 31.

BSEE said Sept. 2 that its figures for the prior day were not accurate.

"We had an IT transmission error" on Sept 1, BSEE National Press Secretary Sandy Day told S&P Global Platts. "Due to a pre-scheduled changeover of IT services well ahead of Ida, there was an error in yesterday's [Sept. 1] report."

On Sept. 1, BSEE said 1.455 million b/d of oil production remained shut-in, roughly 80% of total Gulf of Mexico output.

SHELL REPORTS DAMAGE TO OFFSHORE FACILITIES

The Sept. 1 information is being corrected and updated, but Day said it was "impossible" to know when it would be released.

While a weaker storm may see producers begin to return oil and gas flows a day or two after it passes, the downtime after Hurricane Ida, which made landfall Aug. 29 packing winds of 150 mph, is likely to drag on because of the extensive damages to terminals and heliports used to access offshore facilities.

Shell said on Sept. 2 that a flyover by Shell of its deepwater assets in the US Gulf of Mexico has found damage to the company's West Delta 143 offshore facilities.

"When it is safe to do so, we will send personnel offshore to provide a closer inspection of these facilities to understand the full extent of the damage and the degree to which our production in the Gulf of Mexico will likely be impacted," Shell said in a statement.

The WD-143 facilities serve as the transfer station for all production from Shell's assets in the Mars corridor in the Mississippi Canyon area of the US Gulf to onshore crude terminals.

"At the early phase of assessment and recovery, approximately 80% of Shell-operated production in the Gulf of Mexico remains offline," the company said, but did not immediately say how much or whether WD-143 was part of that total.

BP said Sept. 2 that flyovers and 360-degree visual assessments that it has conducted across the US Gulf of Mexico have indicated "no obvious major damage" to its four large producing platforms in that region.

But "production will remain shut in until further confirmation is obtained which indicates safe and reliable operations may resume," BP said in a statement.

"Weather permitting, our team will assess habitability and provide a more comprehensive update of the platforms' statuses as safety permits," the company said.

Also, BP's onshore assets at Houma and Port Fourchon, both in south Louisiana, experienced the "brunt of Hurricane Ida's inland force" and damaged both facilities that will require repairs, said the company.

BP TO TEMPORARILY RELOCATE SHORE BASE, HELIPORT

"In the interim, we will temporarily relocate our shore base and heliport to other locations," BP said.

The company's midstream and downstream assets are in various stages of startup and await facility inspections and power restoration.

BP's four large US Gulf platforms are: Thunder Horse, Atlantis, Mad Dog and Na Kika.

Other upstream companies are also relocating their shore based operations.

Norway's Equinor conducted a flyover and confirmed that its Titan platform is "intact," Ola Morten Aanestad said Sept. 2.

"But it is too early to estimate when we can reman the installation and restart production," he said.

Shell also said it plans to establish what it called a "temporary crew-change heliport," since the primary crew-change heliport in Houma, Louisiana suffered "significant damage" during the storm.

Also, BHP Billiton said it had temporarily relocated its shore base from Port Fourchon to Galveston, Texas and was in the process of setting up operations.

Titan is Equinor's only operated field.

Equinor is partnered with other large operators on a number of US Gulf production hubs, including Chevron-operated Jack/St Malo, Big Foot and Tahiti, Occidental Petroleum-operated Caesar-Tonga, ExxonMobil-operated Julia and Hess-operated Stampede.

PORTS BEGIN TO REOPEN

The US Coast Guard reopened the Port of New Orleans late Sept. 1, but restrictions remain with the Mississippi River closed from Mile 105 through 108 due to downed transmission lines and from Mile 180 to 167.5 for barge recovery.

"The Coast Guard is working to reopen the river from Mile 108-Mile 167.5. An estimated time for the opening was not provided. The [Army ] Corps [of Engineers] is surveying the channel in the area to locate any obstructions," according to a note on the Sept. 2 morning conference call held by the New Orleans Board of Trade.

"They estimate it is going to take 4 days to run the surveys. Entergy continues their efforts to remove the transmission lines that fell into the river. All going well, the lines should be removed by tomorrow evening at the latest," according to the NOBOT note.

However, according to the USGC, the port of Houma and the Louisiana Offshore Oil Port remain closed.

According to LOOP's website, LOOP is working directly with shippers to minimize storm related impacts and that facility assessments and repairs are underway.