LDN - Business

Hurricane Delta shuts most U.S. offshore oil output in 15 years

[October 10, 2020] HOUSTON (Reuters) - Large and powerful Hurricane Delta dealt the greatest blow to U.S. offshore Gulf of Mexico energy production in 15 years, halting most of the region's oil and nearly two-thirds of natural gas output.

Delta packed 110 mile-per-hour (175 kph) winds as it churned through the Gulf's prime oil-producing area toward landfall on coastal Louisiana. It was 80 miles (129 km) from Cameron, Louisiana and moving northeast at 14 mph, according to a 1 p.m. CDT update from the U.S. National Hurricane Center.

Delta has shut 1.69 million barrels per day, or 92% of the Gulf's oil output, as of midday Friday, the most since 2005 when Hurricane Katrina destroyed more than 100 offshore platforms and hobbled output for months.

Ports from Beaumont, Texas, to Lake Charles, Louisiana, were closed while those further east, including Morgan City and New Orleans were open with restrictions, the U.S. Coast Guard said.

Crude oil <LCOc1> prices fell 1% on Friday, but were on track for gains for the week, boosted by outages in the Gulf of Mexico and in the North Sea. Norwegian offshore workers on Friday ended a 10-day strike that had some of the country's oil and gas output. {O/R]

U.S. natural gas futures rose 4.5% on Friday and were on track to close at the highest since November 2019 on the shut-ins and prospects for cooler weather ahead. [NGA/]

Workers had evacuated 281 offshore Gulf of Mexico facilities and producers moved 14 drilling rigs away from Delta's large windfield. Tropical force winds stretched up to 160 miles from its center, the NHC said, a sign of its large size.

[to top of second column]

The Petronius oil platform is seen from the air, located 100 miles (161 km) off the coast of New Orleans in the Gulf of Mexico June 3, 2008. REUTERS/Jessica Rinaldi

Delta's force will decrease as it approaches the coast but is expected to remain a Category 2 storm on the 5-step Saffir-Simpson scale when it hits the coast Friday night. It will bring a 4- to 11-foot (1.2-3.3 meters) storm surge to the coast near landfall, the NHC said.

In addition to oil, producers have halted nearly 62% of the region's natural gas output, or 1.684 billion cubic feet per day. Offshore Gulf of Mexico fields produce about 15% of U.S. crude oil and 5% of its natural gas production.

Total SA on Thursday began shutting an oil processing unit at its 225,500 barrel-per-day (bpd) Port Arthur, Texas, refinery because of the threat from Delta, people familiar with plant operations said.

Royal Dutch Shell Plc said it would continue operating its refineries in Convent, Geismar and Norco, Louisiana, through the storm.

(Reporting by Gary McWilliams and Erwin Seba; Editing by Marguerita Choy and David Gregorio)

Back to top