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Katrina Targeting U.S. Oil Operations
(Justin Bachman, Associated Press, August 28, 2005)
With crude oil prices already at record levels, a hurricane targeted the heart of America's oil and refinery operations Sunday, shutting down an estimated 1 million barrels of daily production and threatening to curtail refining activity in the region. . . . Katrina, a Category 5 storm expected to strike near New Orleans early Monday, was churning through the Gulf of Mexico. The area is crucial to the nation's energy infrastructure _ offshore oil and gas production, import terminals, pipeline networks and numerous refining operations throughout southern Louisiana and Mississippi. . . . Oil companies have evacuated workers and closed at about 1 million barrels of daily production in the Gulf, but that amount could be higher because not every producer reports data, said Peter Beutel, an oil analyst with Cameron Hanover. . . . "It's not looking real friendly here. This is unmitigated, bad news for consumers," he said. . . . Gasoline prices could see the largest spikes because so many refineries in the region could be shut down by flooding, power outages, or both, energy analysts said. . . . refining capacity is extraordinarily tight. As a result, prices for gasoline, heating oil, jet fuel and other products have flirted with records and could go even higher this week. . . . "If this thing knocks out significant quantities of refining capacity ... we're going to be in deep, dark trouble," said Ed Silliere, vice president of risk management at Energy Merchant LLC in New York. . . . ChevronTexaco Corp. completed evacuations of all workers in the eastern and central Gulf of Mexico and nonessential workers in the western Gulf late Saturday, company spokesman Matt Carmichael said. . . . The Louisiana Offshore Oil Port, which processes loads from tankers too large for mainland ports, evacuated all workers and stopped unloading ships on Saturday morning said Mark Bugg, the terminal's manager of scheduling. The LOOP, 20 miles offshore, is the nation's largest oil import terminal and handles 11 percent of U.S. oil imports. . . . Royal Dutch-Shell Group evacuated more than 1,000 offshore workers by Saturday. Only those in the far west remained, the company said on its Web site. BP PLC and ExxonMobil Corp. also brought workers ashore Saturday. . . . Shell estimated 420,000 barrels of oil and 1.35 million cubic feet of gas per day will be shut in at its central and eastern Gulf facilities. Exxon Mobil said it has ceased daily production of 3,000 barrels of oil and 50 million cubic feet of gas. . . . Valero Energy Corp. evacuated all but a few workers at its 260,000-barrel-a-day St. Charles refinery on Saturday. Murphy Oil Corp. also shut down its 120,000-barrel-a-day Meraux, La., refinery, and Exxon Mobil Corp. planned to shut down its 183,000-barrel-a-day refinery in Chalmette, La. . . . Motiva Enterprises, a joint venture of Royal Dutch Shell PLC and state-owned Saudi Arabian Oil Co., began implementing hurricane contingency plans at its 225,000-barrel-a-day Norco refinery on Saturday. Motiva also was exploring contingencies for its 235,000-barrel-a-day Convent refinery, about 45 miles west of New Orleans, Dow Jones Newswires reported.

posted by LoZo 3:27 PM