Oil companies evacuate workers as Ida approaches

State News

November 10, 2009

Anonymous Picayune Item Tue Nov 10, 2009, 07:35 AM CST

New York — Oil companies are evacuating workers from operations in the Gulf of Mexico as Tropical Storm Ida approaches.

Chevron Corp. said Monday it has removed enough employees to affect oil production in the Gulf. The company said in a news release that it is closely watching its Pascagoula refinery, located on the Mississippi coast between Mobile, Ala. and New Orleans, and taking “all necessary steps” to secure it ahead of the storm.

Ida was moving north-northwest about 185 miles off of the Mississippi River early Monday with winds reaching 70 mph. It was downgraded from a Category 1 hurricane earlier in the day.

The storm trajectory would put it east of New Orleans and the majority of oil and gas facilities in the Gulf, but that can change quickly. Oil fields in the Gulf of Mexico account for about 25 percent of U.S. crude production and 15 percent of natural gas production.

Oil and gas producers pull workers off of platforms and from other facilities as a matter of policy if a serious storm threatens. How that affects production, and energy prices, depends on the severity of the storm.

When hurricanes struck the Gulf Coast last year, gasoline prices in some parts of the country spiked.

A Category 1 hurricane like Ida can lead to shut-ins that take 1.3 million barrels of oil off the market, according to the Energy Information Administration. Those production numbers plummet when hurricanes hit Category 4. Such a storm could remove 14.6 million barrels of production.

Last year, hurricanes Gustav and Ike cut production by a combined 61.1 million barrels of crude.

It is not clear how a drop in production would affect prices this year. The country has been sitting on a huge stockpile of crude and natural gas as factories shut down and millions of Americans were given pink slips during the recession.

Still, producers are taking precautions as the storm approaches.

BP also has evacuated some personnel and cut back on production.

Royal Dutch Shell and Anadarko Petroleum Corp. pulled workers from production and drilling operations in the Gulf. Both companies said the evacuation has not affected oil production so far.

Exxon Mobil also relocated nonessential workers from offshore facilities that are in the path of the storm.

Valero Energy Corp., which has a refinery west of New Orleans, says it is tracking Ida, but so far it hasn’t removed any workers. Valero spokesman Bill Day said refineries are built with hurricanes in mind, and they’re usually tough enough to withstand heavy storms.

The Louisiana Offshore Oil Port evacuated personnel from an offshore platform and stopped vessels from unloading their crude. LOOP spokeswoman Sherry Dupre said the port has enough oil to supply its customers until the platform reopens midweek.

Crude prices rose almost 3 percent, or $2.26, to $79.69 Monday.

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