Oil companies cautious as winds blow in U.S. Gulf
NEW YORK (Reuters) - Recent accidents and spills have made the U.S. energy industry more risk-averse in the face of potential hurricanes, leading to more extensive precautionary shutdowns than in the past and adding to supply disruptions during hurricane season.
This week a cluster of wind squalls that for a time threatened to form into a storm triggered mass evacuations of offshore oil rigs and shut nearly 63 percent of the Gulf's crude oil output.
The shutdown was the largest in the Gulf of Mexico since 2005 when massive hurricanes Katrina and Rita barreled across the offshore rigs and into the coast, inflicting billions of dollars in damage. Yet by Friday, little damage was expected and companies were already preparing to resume production.
"Most companies are just hypersensitive these days about protecting their employees," said Jim Ritterbusch, president of Ritterbusch and Associates. "It's not just because they want to keep good workers, but it is also an immense public relations issue at the moment."
A deadly explosion at BP's oil refinery in Texas in 2005 which killed 15 workers and an oil spill at its field in Alaska in 2006 had focused the industry to improve its record on safety and the environment.
Oil industry association the American Petroleum Institute said companies were particularly concerned with storm safety in the Gulf of Mexico after the devastating storms of 2005.
"It's an individual company decision but after Rita and Katrina we had a series of discussions and dialogues about best practices and I'd expect them to put those to use," said John Felmy, API director.
He added that a recent hurricane, Humberto, which quickly formed in the Gulf of Mexico in mid-September and knocked out three oil refineries, was also fresh on the industry's mind.
"I think the evacuations we've seen are a function of caution after the most recent storm Humberto that appeared so quickly, and after you've had a couple of Category 5 storms already," Felmy said.
The extra sensitivity to foul weather in the Gulf Coast could spell more volatility for the price of oil. The shutdowns from the region, home to a quarter of the nation's oil production, fueled a record rally in oil prices to $84 a barrel this week.
Oil companies on Friday, however, were eyeing a fast recovery from the storm after it failed to strengthen significantly.
Shell Oil Co (RDSa.L), Total SA (TOTF.PA), and Transocean (RIG.N) said on Friday they were planning to bring workers back out to their platforms to restart production through the weekend.
"Assuming no other storms, they should all be back up and running by Monday," Ritterbusch said.
The tropical depression was forecast to hit the Mississippi coastline sometime Saturday, possibly as a tropical storm.
"You can never predict what one of these things will do and that's why the oil industry is being so cautious," said Richard Wheatley, spokesman for El Paso Corp. (EP.N)
