Storm Fay unlikely to disrupt offshore production

By Erwin Seba

HOUSTON (Reuters) - Tropical Storm Fay is unlikely to disrupt oil and natural gas production in the Gulf of Mexico, offshore operators said on Monday.

Instead of heading toward the U.S. offshore oil patch, the storm is forecast to enter the far southeastern Gulf of Mexico before striking Florida as a hurricane on Tuesday.

September crude was down more than 30 cents, trading at about $113.40 a barrel, on the New York Mercantile Exchange Monday.

Shell Oil Co evacuated 425 employees over the weekend but said no more evacuations were expected.

"If the storm remains on its current track, there will be no further evacuations and we now begin planning the safe redeployment of those personnel," Shell said in a statement. "There has been no impact to Shell-operated production."

Marathon Oil Corp, the only other company to report evacuations of nonessential workers, said production remained unaffected and the company had stopped removing workers from the central Gulf.

The Louisiana Offshore Oil Port LLC, Anadarko, BP, Exxon Mobil, ConocoPhillips and Noble all said their operations were unaffected by Fay, the third storm of the 2008 Atlantic hurricane season to menace U.S. Gulf oil and natural gas production, which provides 25 percent of U.S. oil output and 15 percent of U.S. natural gas production.

Noble added that it was studying forecasts to determine if it would have to evacuate the Noble Jim Thompson drilling rig, which has a 45-member crew.

The sixth cyclone of what experts predict will be an unusually busy Atlantic hurricane season, Fay was churning across central Cuba on Monday morning, U.S forecasters said.

This year's Hurricane Dolly and Tropical Storm Edouard only temporarily shut fractions of offshore production and did not outweigh geopolitical factors or the U.S. economic outlook in determining crude oil and refined products prices.

Gulf of Mexico producers fear a repeat of 2005 when hurricanes Katrina and Rita temporarily shut a quarter of U.S. oil and fuel production, sending prices to then-record highs.

Shell Oil Co, the U.S. unit of Royal Dutch Shell Plc, is the leading deepwater producer in the Gulf of Mexico, from where it draws 80 percent of its U.S. oil and natural gas production.

Shell's eastern-most Gulf platform is the Ram-Powell. Other eastern Gulf Shell platforms are Mars and Ursa.

(Editing by Christian Wiessner)