Oil and natural gas producers and drilling contractors were processing good and bad news as they continued evacuations and production shut-ins over the weekend ahead of Hurricane Dean’s arrival in the Gulf of Mexico (GOM). While the Category 4 hurricane was threatening to strengthen to Category 5 strength (155 mph-plus winds), a Bermuda high-pressure system was working to keep Dean on a mostly western track into Mexico, likely sparing most U.S. Gulf infrastructure and the Texas coast from direct hits.
As of 5 p.m. EDT Monday, the center of Dean was located 270 miles east of Chetumal, Mexico, traveling west at 20 mph with maximum sustained winds near 150 mph, according to the National Hurricane Center (NHC). The government forecasting agency said Dean could reach Category 5 sometime before landfall on the Yucatan Peninsula early Tuesday morning.
The change in path over the weekend sent natural gas futures traders into selling mode with the September contract dropping in Sunday’s overnight Globex session and Monday’s regular trading session to close Monday afternoon at $6.040, down 97 cents from Friday’s close (see related story).
AccuWeather.com said Sunday the potential is there for Dean to become part of an elite group of Category 5 hurricanes. As Dean’s path guides it through warm 84- to 86-degree water and an area of little shear, the forecasting firm said the hurricane will strengthen until it reaches land.
However, the United States and a large portion of the Gulf was expected to escape without a direct hit. “A large and expansive Bermuda high-pressure system will move westward in tandem with Hurricane Dean over the next several days, keeping the powerful hurricane on a slightly north of due west track,” said Kristina Baker, a meteorologist with AccuWeather.com.
The forecasting firm projects that Dean will reach the Yucatan Peninsula Tuesday morning. “After progressing through the peninsula, Dean will hit the Gulf again for roughly 24 hours,” said Eric Reese, a meteorologist with AccuWeather.com. “It will make landfall again late Wednesday on the central coast of Mexico. High pressure in the southern United States is helping to track this storm south of any U.S. interests.”
While U.S. oil and gas interests appear mostly safe, the same can’t be said for their Mexican counterparts. Mexico’s national oil and natural gas exploration and production company, Pemex, was not expected to be as lucky. The company said it has evacuated more than 14,000 offshore workers and has shut-in 2.7 million b/d of oil and 2.6 Bcf/d of natural gas. Dean was expected to pound the heart of Pemex’s oil and gas production base as it crosses the prolific Campeche Sound on Tuesday.
The western Gulf appears to be in the most danger from the storm’s most recent projected path. According to the Minerals Management Service (MMS) Monday afternoon, personnel have been evacuated from a total of 10 production platforms, equivalent to 1.2% of the 834 manned platforms in the Gulf. Personnel from 24 mobile rigs have also been evacuated; this is equivalent to 24% of the 101 rigs currently operating in the Gulf.
From the operators’ reports, the MMS estimates that approximately 3.2% of the oil production in the Gulf has been shut in, or roughly 41,967 b/d. Estimated oil production from the Gulf of Mexico as of April 2007 was 1.3 million b/d. It is also estimated that approximately 1.3% of the natural gas production in the Gulf has been shut in, or roughly 100 MMcf/d. Estimated natural gas production from the Gulf of Mexico as of April 2007 was 7.7 Bcf/d.
Highlighting the change in Dean’s forecasted path, Shell said that due to “high confidence” in Dean’s track over the next several days, the company is suspending any further personnel evacuations. Shell-operated production shut-in as a result of Dean were approximately 39,000 b/d of oil and 97.5 MMcf/d of gas. Shell said it evacuated approximately 380 personnel on Saturday with approximately another 200 on Sunday
With Dean’s course not expected to change, Shell said it is now also monitoring Tropical Disturbance #37 “as it may potentially impact portions of the eastern Gulf of Mexico late this week into next week.”
A number of other Gulf producers had evacuated nonessential personnel and were monitoring Dean closely without shut-ins. Drilling contractors were also on top of the situation.
“Our precautionary actions through Monday include actual and planned evacuations of approximately 480 personnel from nine mobile offshore drilling units in the U.S. Gulf of Mexico — five semisubmersible rigs and four drillships,” said Guy Cantwell, a spokesman for Transocean, which operates the largest fleet of deepwater drilling rigs in the U.S. Gulf. “Most of our rigs have secured wells and related equipment. If Hurricane Dean goes into the Mexican coast, we will resume operations as quickly as possible.
“We fully evacuated [Saturday] the moored semisubmersible rig, Transocean Amirante, of 92 personnel, and plan to fully evacuate another moored semisubmersible rig, Falcon 100, of 93 personnel by Monday afternoon. Both are among the most westerly rigs in our GOM fleet. By the end of Monday, we will have approximately 800 people on our 10 rigs in the U.S. GOM, compared with 1,270 three days ago.”
While a direct hit was unlikely, high winds, coastal surge and rains associated with Dean could still batter areas of Texas. In response to the expected hurricane impact, California Gov. Arnold Schwarzenegger announced Sunday he was sending teams from the state’s Urban Search and Rescue Program, and 43 professionals and specialized equipment were on their way to Dallas by midday. They will be mobilized in Dallas to go into impacted areas once the storm hits, the governor’s office said.
“I want to make sure California does everything it can to help authorities in Texas as they prepare for the impact of Hurricane Dean,” Schwarzenegger said. DES “My Office of Emergency Services will continue to monitor the situation and stands ready to assist in deploying whatever other available resources it can to help Texas state officials and FEMA [Federal Emergency Management Administration] respond to and recover from this storm.”
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