The Energy Information Administration (EIA) says the probability of potential hurricanes significantly impacting Gulf of Mexico oil and natural gas production this summer is small.
While the National Oceanic and Atmospheric Administration (NOAA) has forecast above-normal hurricane activity in the Atlantic Basin this summer (seven to 10 hurricanes of which three to five will be intense), "the likelihood of a repeat of the destruction caused by Hurricanes Katrina and Rita in 2005 is relatively small," the EIA said in a report issued Tuesday.
"Based on the results of a Monte Carlo hurricane outage simulation, which is conditional on how NOAA's most recent predictions for the level of Atlantic basin hurricane activity compare to historical activity, we expect a total of about 13.2 million barrels of crude oil and 86.5 Bcf of natural gas to be shut in during the 2007 hurricane season," which runs through November, the agency noted.
"Our simulation results indicate a 1.3% probability of more than 100 million bbls of crude oil and/or 600 Bcf of natural gas being shut in during the 2007 hurricane season, similar to the cumulative impact of Hurricanes Katrina and Rita in 2005," the EIA said. "Conversely, we project a 2.2% chance that offshore Gulf of Mexico production will be unaffected this year as it was during last year's hurricane season."
Through the end of 2005, the Minerals Management Service reported that the cumulative production loss from the two hurricanes was 109 million bbls of crude oil (about 20% of annual Gulf oil production) and 561 Bcf of natural gas output (15.3% of annual Gulf gas production).
"Although Hurricanes Katrina and Rita had effects on Gulf crude oil and natural gas operations that lasted many months, severe weather in the region historically impacts operations only for short periods of time," the EIA said. It noted that there have been six major hurricanes during the past decade that have caused significant disruption in oil and gas production: Opal (1995), Georges (1998), Lili (2002), Ivan (2004) and Katrina and Rita (2005).
"However, with the exception of Ivan, which shut in an average of about 25% of monthly production, and Katrina and Rita, which shut in about 70% of monthly production, most disruptions have been temporary with near-normal production returning the following month," the agency noted.
©Copyright 2007 Intelligence Press Inc. All rights reserved. The preceding news report may not be republished or redistributed, in whole or in part, in any form, without prior written consent of Intelligence Press, Inc.