Oil Platforms Evacuated As Storm Approaches GOM

Published at 05:07PM - 30/08/16

Oil platforms have been evacuated in the Gulf of Mexico, shutting down a large swathe of the region’s oil production, as a tropical storm nears the region.

According to a report by the US Bureau of Safety and Environmental Enforcement (BSEE), personnel have been evacuated from six production platforms and one rig, while five dynamically-positioned rigs were moved out of the storm’s path.

“The [BSEE] team will continue to work with offshore operators and other state and federal agencies until operations return to normal and the storm is no longer a threat to Gulf of Mexico oil and gas activities”, the report reads.

Oil Platforms Evacuated As Storm Approaches Gulf

The BSEE estimates that 11.48% of current oil production and 5.51% of current gas production has been shut in, in the US Gulf of Mexico.

BP announced on Monday it had shut in four platforms and was in the process of shutting three others, while Shell announced it had suspended drilling operations although its Gulf production facilities would not be affected by the storm.

Gulf of Mexico Oil Production Shut in on Tropical Storm
Shell followed BP’s lead and is also evacuating platform workers

Other companies have followed, like Transocean and Anadarko, but most operators are planning to maintain rig operations with reduced staff.

“After the storm has passed, facilities will be inspected. Once all standard checks have been completed, production from undamaged facilities will be brought back online immediately,” the BSEE added.

Storm Threat Impacts Crude Oil Prices

The shut-in of approximately 150,000 barrels of crude production per day due to storm precautions already had an impact on crude oil prices, with Brent and WTI marginally going up on the fear of a heavy tropical storm further affecting production.

However, traders continue to wait for OPEC’s decision before predicting any further changes.

Crude oil prices had fallen in recent sessions amid concerns that the next OPEC meeting would not result in any output cuts, especially after the most recent freeze proposal collapsed.

Brent was up 0.6% to $49.57 while WTI gained 0.8% at $47.38.