Gulf Operators Count the Cost

 - October 23, 2006, 12:35 PM

Inspectors waded through flooded refineries and helicopters passed over wounded drilling rigs in the Gulf of Mexico early last month, as oil companies struggled to assess how long it would take to recover from the effects of Hurricane Katrina.

As the storm slammed through the Gulf on August 29, energy companies evacuated offshore workers by helicopter and shut down more than 90 percent of the area’s oil production. As it progressed, the storm caused the biggest disruption to Gulf of Mexico production since Hurricane Ivan last year. Then, in destroying seven platforms and damaging more than 100 underwater pipelines, it reduced the area’s annual output by 7 percent. The Gulf of Mexico accounts for about a quarter of the nation’s domestic oil production.

Katrina ripped drilling rigs from moorings, damaged production platforms and curtailed pipeline shipments, rendering idle 11 percent f U.S. refining capacity and leaving supplies vulnerable to another crisis. A shortage of helicopters and workers limited efforts by companies such as ExxonMobil and BP to assess post-storm damage to the 819 staffed production platforms and 137 drilling rigs off Louisiana and Texas.

“[Katrina] caused catastrophic devastation,” said the U.S. Coast Guard in a statement on its Web site. According to the statement, five oil rigs from the West Delta Platform were missing, one submersible rig grounded, two mobile offshore drilling units adrift, two semi-submersibles listing and the Shell Mars platform severely damaged.

On a slightly more optimistic note, a BP official later reported that a fly-by inspection of several deepwater platforms showed no significant damage. Helicopters landed small teams on some of them to perform a more detailed inspection. A BP spokesman said the platforms Na Kika, Mad Dog, Thunder Horse, Horn Mountain and Holstein–all expensive deepwater facilities–appeared to be in good shape.

The U.S. Coast Guard reported at least 20 oil rigs or platforms missing in the Gulf of Mexico, while officials estimated 95 percent of regional oil and natural gas production and eight refineries along the coast remained shut down.