Onshore damage curtailing good share of USG oil output: MMS

Washington (Platts)--16Sep2005

About 90% of the Gulf of Mexico's oil and natural gas production will
be restored by mid- to late October after being shut-in by Hurricane Katrina,
Johnnie Burton, director of the US Minerals Management Service, said Friday.
     That compares to a forecast made last week by the department that 90% of
USG output would be restored by the end of September. Burton cited the
difficulty in making assessments offshore as the reason for the revision.
     "None of us can tell you how many (exact) days it will take," she told
reporters during a briefing.
     Burton also said that 35% of the oil shut-ins are due to damage to
onshore infrastructure such as pipelines, terminals and refineries. For gas,
34.11% of the shut-ins are due to onshore problems. As of Thursday, MMS said
56.14% of the Gulf's normal 1.5-mil b/d of oil production was still curtailed,
as was 34.10% of normal gas output of 10 Bcf/d.
     "When you look at the total complex, it suggests you won't see (a rate
of) 90% of production reaching market for another three months," she said,
suggesting the restoration will be gradual.
     Burton also said Royal Dutch Shell's Mars platform was "hit pretty hard"
by Katrina and suffered extensive damage.
     MMS reiterated earlier assessments that the heaviest storm damage was
sustained by four deepwater Gulf platforms that handle a combined 10% of
offshore output. The agency has said the platforms could be down for three to
six months.
     Burton also said if there are requests to use tankers to shuttle crude to
shore in order to bypass downed pipelines, MMS could make a decision in two or
three days. And while the agency has not yet received any requests to flare
offshore gas that can be produced but not brought to market, Burton does
expect to receive some, which will be reviewed on a case-by-case basis, she
said.

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