U.S. oil producers shut offshore output as storm forms in Gulf of Mexico

By Collin Eaton (NYSE:ETN) and Erwin Seba

HOUSTON (Reuters) – Anadarko Petroleum Corp (N:APC) has joined major U.S. oil producers shutting production and withdrawing staff from offshore platforms in the U.S. Gulf of Mexico ahead of a storm threatening oil-producing areas.

U.S. oil prices climbed 2.7% on Wednesday as more producers shut production and removed workers at Gulf oil and gas platforms. A tropical cyclone could form by Thursday, moving westward over the northern Gulf of Mexico, with the potential to produce a storm surge from Louisiana to the upper Texas coast, according to the National Hurricane Center.

Anadarko said it is stopping all oil and gas production and removing all workers from four central Gulf facilities, the Constitution, Heidelberg, Holstein and Marco Polo platforms. It is also evacuating non-essential staff from its eastern Gulf platforms.

Andarko’s total Gulf output averaged 166,000 barrels of oil equivalent per day in the first quarter.

Operations at the Louisiana Offshore Oil Port, the only U.S. port where the largest crude tankers can operate, were normal on Wednesday morning, a spokeswoman said.

Motiva Enterprises’ [MOTIV.UL] 607,000 barrel per day (bpd) Port Arthur, Texas, refinery, the nation’s largest, was monitoring the developing storm on Monday and preparing to implement its hurricane plan as needed, the company said in a statement.

The Motiva refinery was one of four refineries in east Texas inundated by more than five feet of rain in a single day during 2017’s Hurricane Harvey.

Marathon Petroleum Corp (N:MPC), the largest U.S. refiner, was also monitoring the storm, which is forecast to come ashore in Louisiana, where the company operates the 564,000 bpd Garyville refinery, spokesman Sid Barth said.

Chevron Corp (N:CVX), Phillips 66 (N:PSX), Exxon Mobil Corp (N:XOM), Royal Dutch Shell Plc (L:RDSa) were preparing for heavy rain and wind at refineries in Louisiana, Mississippi and Texas.

Chevron has now shut in production at five Gulf platforms – Big Foot, Blind Faith, Genesis, Petronius and Tahiti – and has begun to evacuate all workers at those facilities, spokeswoman Veronica Flores-Paniagua said. Its Gulf oil output last year averaged 186,000 barrels per day.

Chevron is preparing its onshore facilities for a potential response, Flores-Paniagua said.

BP (LON:BP), the second-largest producer in the Gulf, is shutting all production at its four Gulf platforms – the Thunder Horse, Atlantis, Mad Dog and Na Kika – which produce more than 300,000 barrels of oil equivalent per day.

Shell and BHP Group Ltd (AX:BHP) were also removing staff from six other offshore energy platforms, according to company statements. Exxon Mobil Corp (N:XOM) was “closely monitoring” the weather disturbance to determine whether its facilities may be affected, a spokeswoman said.

Two independent Gulf producers, Fieldwood Energy LLC and LLOG Exploration Company LLC, declined to comment.

U.S. crude futures rose $1.55, or 2.7%, to $59.38 a barrel in early Wednesday trade.