Oil Producers Shut-In as Hurricane Zeta Barrels Toward Gulf Coast

Hurricane Zeta pictured October 26, 2020. Image courtesy NOAA/GOES

By Erwin Seba HOUSTON, Oct 26 (Reuters) – Oil producers on Monday shut offshore production and pulled workers off platforms in the U.S. Gulf of Mexico as the 27th named storm of the season strengthened into a hurricane and took aim at the U.S. Gulf Coast.

BP, Chevron and Equinor ASA evacuated platforms and halted production, spokespeople said, as Zeta steamed toward Mexico’s Yucatan Peninsula. The hurricane is forecast to sweep across the resort area and churn through Gulf of Mexico oilfields.

Energy producers shut 16%, or 293,656 barrels per day (bpd) of oil and 6% of natural gas output, or 162.57 million cubic feet per day, the U.S. offshore energy regulator said.

Zeta was 90 miles (145 km) southeast of Cozumel, Mexico, packing maximum sustained winds of 80 miles per hour (130 km per hour) at 4 p.m. CDT (2100 GMT). It could approach the northern Gulf Coast at or near hurricane strength on Wednesday, the U.S. National Hurricane Center said.

BHP Group Ltd also withdrew staff from its U.S. Gulf of Mexico offshore facilities, and Royal Dutch Shell paused drilling and limited staff movement to its platforms. Shell has not halted production, it said in a statement.

Occidental Petroleum Corp., the third-largest producer in the offshore Gulf of Mexico, was taking steps to prepare facilities in the storm’s path.

It has been a challenging year for Gulf of Mexico oil and gas producers, with companies withdrawing workers and halting output at least six times as storms churned through.

Latest Forecast: www.hurricanes.gov

U.S. Gulf of Mexico offshore oil production accounts for about 17% of total U.S. crude oil output and 5% of total U.S. dry natural gas production.

If Zeta strikes the U.S. mainland, it would top the record of 10 named storms to make a U.S. landfall during the span of one hurricane season, set only weeks ago by Hurricane Delta.

Louisiana Offshore Oil Port, the largest deepwater oil export port on the U.S. Gulf Coast, is implementing storm procedures, it said. Oil deliveries to its onshore storage were unaffected.

Export ports from Baton Rouge, Louisiana, to Pascagoula, Mississippi, were open on Monday but under warnings to expect gale force winds within 48 hours. (Reporting by Erwin Seba; writing by Gary McWilliams; Editing by David Gregorio and Marguerita Choy)

© 2020 Bloomberg L.P

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