Most U.S. Gulf oil production seen back by March: MMS

By Bruce Nichols

HOUSTON (Reuters) - Most Gulf of Mexico oil and gas production that remains shut after Hurricane Ike will be restored by one pipeline repair project expected to finish by March, a U.S. government official said on Tuesday.

The repair will bring several deepwater platforms back on line at once, said Lars Herbst, Gulf region director for the U.S. Minerals Management Service.

"Once that ... pipeline system is repaired, all of that will come back on at one time, and that's at least half if not three-quarters of what's remaining shut in," he said.

Herbst declined to name the platforms and pipelines involved in the outage.

The MMS said last week that 27.7 percent of oil production and 33 percent of natural gas output was still out. At the peak of the storm, nearly all production was shut down in the Gulf, which produces 1.3 million barrels of oil and 7.4 billion cubic feet of gas daily when fully operational.

The repair is supposed to be finished three to six months after the storm, which came ashore near Houston September 13 after destroying at least 54 production platforms and snarling several offshore pipelines.

Herbst said he hoped the key pipeline repair could be finished before March, but other recovery work may take longer, making 100 percent production several more months away.

Progress toward resumption of oil and gas flows was relatively swift at first, but has slowed. Still, Herbst said, recovery is moving faster than after Hurricanes Katrina and Rita in 2005.

Herbst said the snag in the wake of Ike is largely because of one lost shallower-water hub platform that served "probably three" deepwater platforms.

"We lost that hub so now we're talking about having to reroute the pipelines around that platform, which is difficult when you have everything else that is toppled in that area," Herbst said.

Ike was not as strong as Katrina and Rita but it was bigger in size and caused 75-foot waves that did major damage in some parts of the Gulf, Herbst said.

Studies are underway to figure out why wave height can grow so large in a relatively weaker storm, Herbst said.

Most of the platforms lost in Ike were relatively small producers, and most other facilities resumed operations relatively quickly through such measures as rerouting oil and gas through different pipelines, MMS has said.

MMS is still evaluating damage from Ike. The final tally will add a few platforms currently classified as damaged to the destroyed list, he said.

(Editing by David Gregorio)