Gulf of Mexico (GOM) operators notched another small advance in efforts to restore natural gas production following hurricanes Gustav and Ike, according to a Tuesday report from the Minerals Management Service (MMS). However, the estimate of oil production restoration took a big step back compared to Monday’s estimate, which turned out to be erroneous.
From 53 operators’ reports MMS estimated that 45.7% of 7.4 Bcf/d of natural gas production in the GOM is shut in. Monday MMS estimated that 47.4% of GOM gas production was shut in. The agency also estimated that 57.1% of 1.3 billion b/d of oil production in the GOM is shut in. This figure increased from Monday’s figure of 48% due to operator errors in reporting for Sept. 29 (see Daily GPI, Sept. 30).
Based on data from offshore operator reports submitted as of 11:30 a.m. CDT Tuesday, personnel are evacuated from 111 production platforms, equivalent to 16% of the 694 manned platforms in the GOM, MMS said. Personnel from one drilling rig are evacuated, which is equivalent to 0.9% of the 116 rigs currently operating in the GOM.
MMS estimates that from Sept. 13 through Sept. 14 approximately 1,450 of more than 3,800 oil and gas production platforms in the GOM were exposed to hurricane conditions, including winds greater than 74 mph.
As of Sept. 29, a total of 52 production platforms have been confirmed as destroyed. Initial estimates are that the 52 destroyed platforms produced 13,300 b/d of oil and 90 MMcf/d of gas. MMS said it has no information on whether any of the destroyed platforms will be rebuilt by operators.
MMS has received reports that indicate 32 platforms have extensive damage, which may take from three to six months to repair. Additional reports show that 41 platforms received moderate damage with repairs expected to take one to three months before production can be restored.
MMS has confirmed a report of one jack-up drilling rig with extensive damage.
The agency has received reports of eight gas transmission pipeline systems with damage, and analysis of the damage is under way.
Production from the GOM accounts for 25% of the oil and 15% of the natural gas produced domestically.
Also Tuesday, W&T Offshore Inc. provided an update on its GOM operations following hurricanes Gustav and Ike. Two operated and nine nonoperated platforms sank, including the operated Eugene Island 371 B and Eugene Island 397 A platforms, W&T said. The company has a 50% working interest in each of the operated platforms. W&T said it is evaluating alternatives for those facilities, including utilizing other platforms. Production associated with these platforms prior to the hurricane was approximately 7.5 MMcfe/d, net to W&T’s interest.
“All other operated structures inspected by air or by physical inspection appear to be intact, but some have incurred damage,” W&T said, noting it has begun the remediation process.
W&T is producing 72 MMcfe/d net (2,264 b/d and 58 MMcfe/d). Based on current production rates and actual production thus far in the quarter, the company said it believes production for the third quarter will be between 19 Bcfe and 21 Bcfe.
“In addition to addressing the damage to our facilities, in order to increase production above current levels, we are dependent on the completion of repairs to third party-owned pipelines and processing facilities that carry or process our production,” the company said. “Although we are working diligently to increase our production, at this time our production for the fourth quarter and therefore full year of 2008 is not determinable with any certainty. We intend to provide an update of the hurricane impact and production guidance for the fourth quarter of 2008 in connection with our third quarter 2008 earnings release.”
Prior to hurricanes Gustav and Ike W&T had eight rigs drilling. It has been able to recommence drilling operations at seven of the eight locations so far.
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