UPDATE 1-Shell shuts wells, starts evacuations in U.S. Gulf

Tue Aug 14, 2007 5:26pm EDT

(Recasts with other company comments, market reactions)

HOUSTON Aug 14 (Reuters) - Shell Oil Co. (RDSa.L) was pulling nonessential workers from the western U.S. Gulf of Mexico on Tuesday as the company prepared to shut in 5 million cubic feet of natural gas production off the south Texas coast, the company said.

U.S. crude futures jumped $1.11 per barrel or 1.5 percent to $73.73 per barrel in the minutes after Shell announced the evacuations.

Shell was the only U.S Gulf oil and natural gas producer removing workers ahead of a band of thunderstorms associated with a tropical wave about 90 miles northwest of the Yucatan Peninsula.

The Hurricane Center sent a U.S. Air Force reconnaissance plane to fly through the storm on Tuesday afternoon.

BP Plc. (BP.L), Anadarko Petroleum Corp. (APC.N), Apache Corp. (APA.N), Valero Energy Corp. (VLO.N) and Marathon Corp. (MRO.N) said they were closely monitoring the storm and were prepared to take action to ensure the safety of the workers.

"We are watching the situation very closely," said Marathon's Paul Weeditz. "We have not evacuated any personnel nor have we shut in any production."

Weeditz said Marathon halted sending nonessential personnel to offshore sites.

Shell pulled 88 workers on Monday night and was planning to pull another 100 on Tuesday.

Shell planned to shut in the natural gas wells in the North Padre 975 field.

(Additional reporting by Erwin Seba, Janet McGurty and Robert Campbell)

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