Oil Companies Halt Gulf of Mexico Offshore Output Ahead of Storms

   By Dan Molinski 
 

Oil and gas companies operating offshore in the Gulf of Mexico were evacuating workers and halting production Saturday as two tropical storms that could become hurricanes head toward the region.

Due to storm preparations and evacuations, total daily offshore crude-oil production in the Gulf of Mexico has been reduced by 13%, or 241,000 barrels, while natural gas production was cut by 4%, or 119 million cubic feet, the U.S. government's Bureau of Safety and Environmental Enforcement said in a statement Saturday. Those percentages are expected to rise in the coming days.

Tropical Storm Marco was bringing heavy rain and wind to Cuba and Mexico's Yucatan Peninsula on Saturday. The National Hurricane Center said Marco was likely to strengthen and become a hurricane later Saturday, but might weaken again Sunday as it moves into the Gulf of Mexico en route toward Texas and Louisiana.

Meanwhile, the center of Tropical Storm Laura was over Puerto Rico Saturday and could impact other Caribbean islands this weekend before moving into the Gulf of Mexico near the tip of Florida around the end of the weekend, the NHC said.

Royal Dutch Shell PLC said in a statement Saturday it was monitoring both Laura and Marco. "As a precautionary measure, Shell is evacuating personnel and safely shutting in production at the majority of our assets in the Gulf of Mexico," the company said. "Drilling operations have been safely paused as well."

BP PLC was taking similar action. "BP has begun securing offshore facilities and has begun the process of evacuating personnel from its platforms and drilling rigs," it said Friday. "BP is also beginning to shut-in production at its four operated platforms in the Gulf of Mexico. Safety is our top priority."

Write to Dan Molinski at [e-mail]

(END) Dow Jones Newswires

August 22, 2020 16:16 ET (20:16 GMT)

Copyright (c) 2020 Dow Jones & Company, Inc.