HOUSTON (Reuters) – Oil and gas workers withdrew en masse from offshore production facilities, and onshore refineries began storm preparations on Wednesday as Hurricane Delta was forecast to intensify into a powerful, Category 3 storm as it crosses the Gulf of Mexico.
Delta’s winds declined to 105 miles per hour (169 kph) as it tore across Mexico’s Yucatan peninsula. But it is expected to enter the Gulf of Mexico and strengthen with winds of up to 120 mph, the National Hurricane Center said.
Oil producers had evacuated 183 offshore facilities in the U.S. Gulf of Mexico by Wednesday and halted nearly 1.5 million barrels per day of oil and 1.33 billion cubic feet per day of natural gas production. The region accounts for about 17% of U.S. oil output.
Energy prices were mixed. Natural gas futures were up more than 3% on storm shut-ins, U.S. crude oil futures fell 2% and gasoline futures declined nearly 3%.
Onshore oil and gas processing plants began securing operations, and the U.S. Coast Guard warned vessels of gale force winds at Louisiana ports in the coming days.
Royal Dutch Shell Plc was preparing three refineries in Convent, Geismar and Norco, Louisiana, for Delta’s arrival. Louisiana Offshore Oil Port, the sole deep water port on the Gulf of Mexico, halted seaborne exports and imports.
Delta likely will generate a life-threatening storm surge and strong winds “over a large portion of the northwestern and northern Gulf coast,” the NHC warned. Louisiana officials advised residents of low-lying and coastal areas to evacuate.
The hurricane could strike Louisiana on the weekend as the 10th named storm to make a U.S. landfall this year, eclipsing a record that has held since 1916.
(Graphic: Hurricane Delta forecast track – https://fingfx.thomsonreuters.com/gfx/mkt/ygdvzkoeapw/Delta2.JPG)
Oil companies have had to evacuate offshore workers repeatedly this year with departures and returns complicated by pandemic quarantines and virus testing.
Delta was at least the sixth time some energy companies have had to remove staff and curtail production since June.
W&T Offshore Inc estimated the storms cost it 9,000 barrels of oil and gas per day in the latest quarter, more than a fifth of its targeted output.
Delta will delay the restart of its Lake Charles refinery, a Louisiana plant shut in August by Hurricane Laura, said refiner Phillips 66. A second Phillips plant, on the Louisiana coast, has remained closed for maintenance since a mid-September storm.
Shell, the largest Gulf of Mexico offshore oil producer by volume, evacuated staff from nine facilities and Chevron Corp evacuated and shut production on all its Gulf of Mexico platforms. BP Plc, BHP, Occidental Petroleum Corp, and Murphy Oil pulled workers out and halted some production.
(Reporting by Erwin Seba; writing by Gary McWilliams; Editing by Leslie Adler, Marguerita Choy and Cynthia Osterman)
