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UPDATE 2-Return of US refineries slower than hoped-Bodman
October 1, 2008 / 3:00 PM / 9 years ago

UPDATE 2-Return of US refineries slower than hoped-Bodman

(Adds quotes on energy demand, OPEC, byline)

By Muriel Boselli

PARIS, Oct 1 (Reuters) - The return of U.S. oil refineries to normal following last month’s Hurricane Ike is taking longer than expected, the U.S. energy secretary said on Wednesday.

Sam Bodman, who was in the French capital for a meeting on nuclear power, also said that long-term energy projects needed to expand supplies and meet demand could be at risk if the financial crisis continued.

Hurricane Ike and earlier storms have disrupted oil supplies in the United States, the world’s top oil consumer, helping to drain inventories. U.S. gasoline stocks as of late last month sank to the lowest since 1967.

“I would have imagined we would have seen more progress,” Bodman told reporters, adding it was expected to take four to five weeks for the refineries to return to normal. “It’s not going to take 10 weeks.”

The energy secretary’s expectation of how long it will take for the refining industry to recover is longer than an estimate he gave on Sept. 25 that there would be “some interruptions” for two to three weeks.

The U.S. Senate was preparing to vote later Wednesday on a revised $700 billion plan aimed at halting the financial crisis, the worst since the 1930s. Some energy projects could be hit if the crisis was not resolved, Bodman said.

“If it doesn’t get results, these long-term projects -- and these are the most difficult to finance -- long-term projects are at risk I would think,” he said.

“Short-term projects like oil wells, they tend not to operate with bank borrowing, they operate on their own.”

Slowing economic growth and high oil prices have curbed demand in the United Sates and other industrialised countries. U.S. energy demand would be affected noticeably if there was no resolution to the financial crisis, Bodman said.

“If it doesn’t get resolved, it will have a significant impact,” he said.

The U.S. was among oil-consuming countries which earlier this year was urging OPEC oil exporters to raise oil output to lower prices, which hit a record high of $147.27 a barrel in July.

Bodman expressed dismay when asked about moves by Russia, the world’s second-largest oil exporter, to forge closer ties with the Organization of the Petroleum Exporting Countries.

“It is not an encouraging position. I would hope that Russia would worry about its investment and encourage foreign companies to invest,” he said. (Reporting by Muriel Boselli; editing by James Jukwey)

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