Dennis’ early strength led to substantial evacuations and production shut ins in the densest production area of the Gulf, but producers reported that they were rapidly repopulating facilities and bringing supply back online Tuesday. Cumulative gas production shut in due to Hurricane Dennis rose to 22.4 Bcf, the Minerals Management Service (MMS) reported. However, daily shut-ins fell to 4.3 Bcf/d based on the reports of 55 companies as of 11 a.m. CDT on Tuesday.
MMS said about 4.99 million bbl of oil has been shut in since last Friday and about 857,975 bbl/d remains shut in because of the storm. A total of 64 manned platforms and 25 rigs were still evacuated Tuesday morning, but producers reported rapid redeployment. Lost production from Tropical Storm Cindy and Hurricane Dennis, from July 5 through July 12 adds up to slightly over 24 Bcf.
BP’s damaged Thunder Horse platform (25% owned by ExxonMobil) was the major casualty from the hurricane. Thunder Horse was found tilting over about 30 degrees Monday morning and BP said a careful underwater evaluation will precede any final determination on whether the start of production on the new facility will be delayed.
The massive $1 billion platform, built around one of the largest gas and oil discoveries in history of the Gulf, was in a development phase when Dennis arrived. Production was scheduled to begin later this year. Thunder Horse has a nameplate capacity for 250,000 bbl/d of oil and 200 MMcf/d of gas. It was expected to reach those production levels over the course of the first 12 months of commercial operation.
A BP spokesman said a 10-ton winch fell overboard during evacuation last Thursday but probably was not the cause of the damage. The company notified the MMS and the U.S. Coast Guard, and conducted flights to further assess the extent of the damage.
Analysts are concerned about the potential for a service delay because of Thunder Horse’s tremendous payload and the current plight of the gas and oil markets, which are experiencing extremely high prices of more than $8/MMBtu and $60/bbl, respectively. “It would create a huge whole if for some reason they can’t get that thing back up and running,” said a spokesman for another major production company. “They certainly have a problem to deal with. It could be producing a quarter of a million barrels of oil for god’s sake. That will make up for a lot of the sharp declines taking place along the shelf.”
Although no other significant damage was reported in the Gulf from Hurricane Dennis, producers now have to keep their eyes on Tropical Storm Emily, which the National Hurricane Center (NHC) has pointed along a path stunningly similar to that of Dennis. The projected route of Emily as of 5 p.m. Tuesday was just south of Cuba, skirting the western tip of the country and on into the Gulf of Mexico. At 5 p.m. the center of Emily was located 475 east-southeast of Barbados, moving west at 20 mph with maximum sustained wind speeds of 50 mph. Producers have until next Sunday or Monday to plan a course of action for Emily.
As of Tuesday afternoon, Apache said that 90% of its oil and gas production was back onstream. Apache’s daily average before the hurricane was 650 MMcf/d of gas and 65,000 bbl/d of oil. “I think everybody for the most part feels that we dodged a bullet,” said Apache spokesman Dave Higgins. “We certainly battened down the hatches in anticipation of being hit pretty hard but the storm went east and didn’t have the aerial extent that Ivan had last fall. We got lucky.”
Higgins said that producers appeared to take no chances with Dennis because of its category four strength early on. That would account for the large platform evacuation numbers and shut ins. But most supply appears to be heading back online rapidly.
“We’ve repopulated all of our platforms and the majority of our production is back online,” said Higgins. “I’m not sure if we are experiencing downstream pipeline problems, but we have a very small amount that is still shut in. With very little damage out there, the issues have been just restarting the generators and compressors and dealing with any third-party pipeline problems that might arise.”
ExxonMobil reported no damage to its facilities. The company said production was slowly coming back online. About 10,000 bbl/d of oil and 200 MMcf/d of gas was still shut in at 5 p.m. EDT, a spokeswoman said. “We sustained no significant damage to our facilities in the Gulf of in Mobile Bay.” She said ExxonMobil’s total production in those areas of the Gulf is 1.2 Bcf/d of gas and 80,000 bbl/d of liquids.
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