U.S. Oil Firms Evacuate Staff, Cut Drilling Ahead of Storm Francine

TEMPO.CO, Houston - U.S. Gulf of Mexico offshore oil and gas producers on Monday were evacuating staff and curbing drilling as Tropical Storm Francine churned through the energy region on a path to bring high winds and drenching rains to the U.S. mid-South.

Francine is moving toward U.S. Gulf of Mexico waters and predicted to become the fourth hurricane of the Atlantic season, which ends Nov. 30. Francine could become a Category 1 hurricane with winds of up to 85 mph (137 kph), ahead of landfall on the Louisiana coast on Wednesday evening, the National Hurricane Center said.

It is likely to bring life-threatening storm surge to the upper Texas and Louisiana coasts and hurricane-force winds to Southern Louisiana this week. New Orleans and other communities began offering flood-preventing sandbags to residents. Grand Isle, on the tip of Louisiana's coast, called for a voluntary evacuation of residents and canceled Tuesday school sessions.

The storm's path puts U.S. oil and gas producing facilities and coastal liquefied natural gas (LNG) export plants at risk. Areas along coastal Louisiana could experience 5-10-foot (1.5-3-m) storm surges, the NHC said.

U.S. Gulf of Mexico federal offshore waters account for about 15% of total U.S. crude oil and 2% of natural gas production.

U.S. crude oil prices on Monday rose 1.5% after falling to multi-month lows last week on worries the storm could disrupt production and refining along the Gulf Coast.

U.S. natural gas futures slumped about 5% on concerns Francine could cut demand by curtailing flows to Gulf Coast LNG export plants and causing homes and businesses to lose power.

OFFSHORE AND ONSHORE IMPACT

Exxon Mobil (XOM.N) said it shut-in output and evacuated staff from its Hoover offshore production platform, about 150 miles (241 km) east of Corpus Christi, Texas.

Shell (SHEL.L) said it was evacuating non-essential personnel from three offshore oil platforms, and had paused drilling operations at two others.

Chevron (CVX.N) is evacuating non-essential staff from four offshore platforms, but production remains at normal levels, a spokesperson said.

BP (BP.L) said it was not expecting major impacts to its Gulf facilities.

Occidental Petroleum (OXY.N) and Woodside Energy (WDS.AX) said they were prepared to implement storm plans as appropriate.

Freeport LNG, which operates the nation's second-largest export plant for the super-chilled gas, said it had begun storm preparations at its Texas plant without providing details.

Cheniere Energy (LNG.N) did not have an immediate comment on its Sabine Pass LNG facility. Sempra (SRE.N) and Venture Global LNG did not reply to requests for comment on their Louisiana liquefaction plants.

Heavy rainfall and the risk of flash flooding is expected from far northeast Mexico to ports of the Texas coast, southern Louisiana and southern Mississippi, the NHC said.

The U.S. Coast Guard has imposed restrictions for vessel navigation in some Texas ports, including the ports of Brownsville, Corpus Christi, and Freeport, which handle oil imports and exports.

The ports of Houston and Galveston in Texas, and New Orleans in Louisiana, were open to vessel traffic on Monday. The deepwater Louisiana Offshore Oil Port (LOOP) was operating in normal conditions.

Texas officials called on residents to prepare for the potential for flash flooding and heavy rain. The Texas electric grid said local outages were possible if the storm hits the state.

In July, Hurricane Beryl killed eight people and left more than 2 million customers without electricity for days in Texas. The outage affected energy infrastructure and left hundreds of gas stations without power.

REUTERS

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