Shell says U.S. Gulf refineries ramping up after Ike

NEW YORK, Sept 29 (Reuters) - Shell said Saturday its U.S. Gulf refining throughput was about 1 million barrels per day out of a total of 1.2 million bpd.

Shell said the 285,000 bpd refinery in Deer Park, Texas which it jointly owns with Mexico's state oil company Pemex, was running nearly at planned rates and making gasoline and other products.

Motiva's 285,000 bpd refinery in Port Arthur, Texas was running at 70 percent of capacity, with planned rates expected within the next few days.

Motiva, a joint venture between Shell and Saudi Aramco, also operates two other refineries on the Gulf Coast -- a 235,000 bpd refinery in Convent, Louisiana and a 220,000 bpd refinery in Norco, Louisiana. Both refineries remained at planned rates.

(Reporting by Janet McGurty; Editing by John Picinich)

Enterprise Updates Operating Status Following Hurricane Ike

Enterprise Products Partners L.P. (NYSE:EPD) today announced that the partnership continues to move forward in returning its facilities to normal operations and assessing the full impact of Hurricane Ike to its onshore and offshore assets. At the Mont Belvieu, Texas complex, natural gas liquids (NGLs) and propylene fractionation activity continue to increase. The NGL fractionation rate has returned to pre-storm levels of approximately 220,000 barrels per day and the propylene fractionation rates are near pre-storm levels. Throughput on the major pipelines connected to the Mont Belvieu complex is also increasing as operations resume at customer facilities. The partnership’s import/export system, which includes a terminal facility along the Houston Ship Channel and pipeline network connected to Mont Belvieu, has also resumed normal operations. Enterprise’s butane isomerization and isooctane units at Mont Belvieu have resumed normal operations following the restoration of hydrogen supplies necessary to operate the equipment.

With the exception of the North Terrebonne plant in Louisiana, Enterprise-operated natural gas processing and fractionation facilities located in the impacted areas are operational and either processing or waiting for natural gas flows to resume to the facilities. Crews have begun the repair process and are developing a plan to resume service at North Terrebonne as quickly as possible. In the meantime, some of the natural gas can be diverted to another Enterprise plant for processing.

Detailed inspections of Enterprise-operated offshore assets have revealed more damage in some cases than initial observations indicated. Assessments of the platforms and pipelines continue, utilizing subsea remote operated vehicles as well as operations and engineering personnel stationed aboard the facilities where appropriate. The platforms impacted by Hurricane Ike include Garden Banks 72, High Island A264 and South Marsh Island 205.

In addition, Enterprise has discovered that a 42-inch diameter segment of pipe that is part of the High Island Offshore System (HIOS), which transports natural gas from various producing fields in the western Gulf of Mexico, has been severed. As a result, natural gas volumes into the system are limited to certain receipt points upstream of the break and require third party pipeline systems for delivery to onshore facilities. Enterprise is investigating damage to the pipeline, which is located in about 130 feet of water, and is developing a plan to repair and return the affected portion to service as quickly and safely as possible.

Pressure tests that have been completed on the Poseidon and Cameron Highway Offshore Pipeline crude oil systems indicate no operational issues. Poseidon is currently transporting crude oil and plans are being finalized to resume service on Cameron Highway later today.

On the natural gas side, the Independence Trail pipeline and Hub system is operating normally and presently delivering more than 900 million cubic feet per day of natural gas. The Viosca Knoll Gathering System (VKGS) and the Falcon pipeline are currently operating; however, throughput on the western portion of VKGS is restricted due to pipeline damage sustained during Hurricane Gustav. Deliveries of natural gas through the partnership’s Anaconda pipeline have been suspended following the loss of a third party platform at Eugene Island 371. Enterprise is pursuing options that would connect Anaconda directly to the export pipelines previously served by the platform.

Enterprise Products Partners L.P. is one of the largest publicly traded partnerships with an enterprise value of approximately $20 billion, and is a leading North American provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil and petrochemicals. Enterprise transports natural gas, NGLs, crude oil and petrochemicals through more than 35,000 miles of onshore and offshore pipelines. Services include natural gas transportation, gathering, processing and storage; NGL fractionation (or separation), transportation, storage, and import and export terminaling; crude oil transportation and offshore production platform services.

Refineries 'a few weeks' from normal

Gulf Coast refineries may still be "a few weeks" away from normal production rates after two hurricanes forced closures and sent inventories to a 41-year low, an Energy Department official said.

At least 46 million barrels of motor fuel was lost between Aug. 30 and Sept. 19 as Hurricanes Gustav and Ike shut 20 percent of U.S. capacity. Retail gasoline prices remained stable, based on national averages, as demand fell, while distributors and marketers in the Southeast and Midwest said customers ran out of fuel.

"We're now at about 85 percent of refinery operations in Louisiana and Mississippi and 43 percent in Texas," Kevin Kolevar, assistant secretary for electricity delivery and energy reliability, said in an interview. "If we don't have any nasty surprises as these refineries come back online, we should see near normal rates in about a few weeks' time."

Gustav struck on Sept. 1 and Ike on Sept. 13, shutting refineries along the Gulf Coast and causing flooding, power outages and wind damage. As of Thursday, four refineries were still shut, five were restarting and nine were running at reduced rates.

Recovery may be hampered after a fire shut a regional fuel terminal in Pasadena, Texas, on Sept. 23. The owner, Kinder Morgan Energy Partners LP, said Thursday that it has resumed "limited operations," The terminal connects at least six refineries to about 35 pipeline systems, which send fuel to terminals in the eastern U.S. and Midwest.

As of Thursday, pipelines that would normally carry 4.9 million barrels a day of gasoline and distillate fuels were shut or running at reduced capacity.

Congress to let offshore drilling ban expire

WASHINGTON (Reuters) - The offshore drilling ban that became a flash point in the U.S. presidential election will expire next week after Democrats decided to drop the prohibition from a temporary spending bill that keeps the government running.

The end of the ban will not lead to a rush of new drilling any time soon, but it would be a big win for Republican Presidential nominee John McCain who has made opening most U.S. offshore areas to drilling a key part of his campaign. His Democratic rival, Barack Obama, supports limited offshore drilling as part of a bigger overhaul of U.S. energy policy.

The mammoth spending bill to keep the U.S. government operating through next March includes a $25 billion loan guarantee package for the auto industry but makes no mention of offshore oil drilling, pushing the politically hot topic to the next president and new Congress.

"The next election will decide what our drilling policy is going to be," said House Appropriations Committee Chairman Rep. David Obey.

Obey said the drilling ban will expire because Democrats could not reach an agreement with Republicans on how much offshore areas should be opened to energy exploration.

"The White House made it clear any new drilling provision was a nonstarter. The future resolution of offshore drilling will have to be addressed with a new President," said a spokesman for House Speaker Nancy Pelosi.

The spending measure that allows the drilling ban to lapse carries a price tag of more than $600 billion and was approved by the House of Representatives floor on Wednesday. The House had to pass the stop-gap spending bill by September 30, the end of the current budget year. C has not approved any of the 12 annual spending bills needed to keep the lights on in Washington.

"We think that lifting the ban on drilling is in the best interest of the American consumer as it gives them access to the billions of barrels of domestic oil and vast quantities of natural gas resources that had been off-limits to drilling," said Karen Matusic, spokeswoman for the American Petroleum Institute.

"If Congress does nothing to limit development by placing arbitrary limits, it is a great step for our nation's energy security," she said.

The Interior Department's current five-year leasing plan calls for possible drilling off the Virginia coast in 2011.

"It would take a substantial period for the administration to change this leasing plan or to develop new leasing plan," Jeff Bingaman, chairman of the Senate's energy committee.

"I think everybody has been working on assumption that on first of October something dramatically different occurs (with offshore drilling. That's not reality," he said.

Congress must pass the stop-gap spending bill by September 30, the end of the current budget year. It has not approved any of the 12 annual spending bills needed to keep the lights on in Washington.

Republicans, led by Presidential hopeful John McCain with his "drill here, drill now" campaign cry, have been pushing for an end to the 25-year-old ban as a way of relieving pressure on high gasoline prices.

House Democrats, saying the increased drilling would not be a quick fix for high gasoline prices, had moved to allow limited drilling 50 miles offshore in a bill that passed the chamber last week. But the bill was strongly opposed by Republicans and the White House as too limited in scope.

Give it the gas

By Anna Thibodeaux, Baton Rouge Business Report

Monday, September 22, 2008

Energy supply fears over Hurricane Gustav quickly eased as refineries reported mostly minor damage and came back online within days of the Labor Day storm.

Only hours after Gustav’s arrival, Placid Refining Co. in Port Allen supplied Broussard-based Macro Oil Co., which was designated by the state to supply gasoline and diesel for emergency needs like hospital generators or emergency vehicles. Placid also provided fuel to emergency responders like fire departments, police and parish vehicles at a temporary fueling station.

Joey Hagmann, Placid’s refinery manager, says the facility sustained minor damage. The refinery, which was coming out of a maintenance turnaround in August, had stored additional volume and arranged to get additional oil by pipeline. When Gustav knocked out electricity, generator power allowed the company to operate its truck rack to load emergency fuel.

ExxonMobil also experienced a power outage and minor damage from the hurricane; repairs were ongoing as of Sept. 12. Spokesman George Pietrogallo Jr. says they are still producing gasoline and chemical products, although full operation isn’t anticipated for as much as 10 days. Since the storm hit, ExxonMobil Corp. has delivered 2.8 million gallons of fuel to Exxon, Mobil and other area stations.

“Louisiana refineries are doing quite well,” says Larry Wall, director of public relations with the Louisiana Mid-Continent Oil and Gas Association. Many of them, like Placid Refining, avoided shortages by building up fuel supplies or arranging for additional supplies in anticipation of the storm.

Eleven of the state’s 17 refineries shut down, while the rest reduced operations in anticipation of Gustav, Wall says. Collectively, they represent 17% of the nation’s refining capacity and refine 2.9 million barrels of oil a day. With mostly minor damages reported from Gustav, all but one had resumed operations by Sept. 12, easing worries about supply and price increases.

The storm did pose two issues for refineries with regaining electricity and access, he says. Most of them got power back shortly after the storm and quickly resolved access issues such as clearing channels to resume operations, easing market worries about supply and price increases.

Less than two weeks after Gustav, Hurricane Ike threatened much of the same area. Energy companies mostly chose not to resume operations and jeopardize crews in anticipation of the storm, which made landfall on Sept. 13 near Galveston, Texas. Texas represents 45% [4.8 million barrels a day] of the nation’s refining capacity and Louisiana 25% [2.9 million].

Supply and price fears again arose, but Wall says the supply was supplemented by other sources including the Strategic Petroleum Reserve, Louisiana Offshore Oil Port foreign imports and other pipelines and barges. A run on local gas stations took place Thursday, Sept. 11 after reports suggested gas prices could hit $5 a gallon because of Ike; a large increase did not materialize.

Citing supply disruptions, the U.S. Department of Energy approved Garyville-based Marathon Oil Corp.’s request for 250,000 barrels from the reserve, which loans oil in emergencies. On Sept. 11, the DOE also announced approval of another 250,000 barrels to Marathon and 130,000 barrels to Placid Oil. In making the requests, the companies cited disruptions in supply caused by Gustav.

IN HARM’S WAY

U.S. refineries located in the path of hurricanes Gustav and Ike and their ranking by barrels per calendar day:

Rank--Company--Site--Barrels per day

1--ExxonMobil--Baytown, Texas--567,000

2--ExxonMobil--Baton Rouge--503,000

3--BP--Texas City, Texas--467,720

4--Citgo--Lake Charles--429,500

6--ExxonMobil--Beaumont, Texas--348,500

8--Chevron USA--Pascagoula, Miss.--330,000

9--Deer Park--Deer Park, Texas--329,800

11--Premcor--Port Arthur, Texas--289,000

13--Flint Hills--Corpus Christi, Texas--288,126

14--Motiva--Port Arthur, Texas--285,000

15--Houston--Houston--270,600

18--Marathon--Garyville--256,000

19--ConocoPhillips--Belle Chasse--247,000

20--ConocoPhillips--Sweeny, Texas--247,000

22--ConocoPhillips--Westlake--239,400

25--Motiva--Norco--236,400

26--Motiva--Convent--235,000

27--Total--Port Arthur, Texas--232,000

32--Valero--Texas City, Texas--199,500

34--Chalmette--Chalmette--192,760

35--Valero--Norco--185,003

45--Citgo--Corpus Christi, Texas--156,000

53--Valero--Corpus Christi, Texas--142,000

57--Murphy Oil--Meraux--120,000

63--Pasadena--Pasadena, Texas--100,000

66--Valero--Three Rivers, Texas--93,000

71--Valero--Houston--83,000

75--Valero--Krotz Springs--80,000

76--Calcasieu--Lake Charles--78,000

79--Marathon--Texas City, Texas--76,000

94--Delek--Tyler, Texas--58,000

97--Placid--Port Allen--56,000

98--Shell--St. Rose--55,000

Oil, gas in fine shape

NEW ORLEANS — “The future is very, very bright for the oil and gas industry in Louisiana,” former U.S. Rep. Chris John, president of the Louisiana Mid-Continent Oil and Gas Association, told 400 representatives from the energy sector Tuesday.

During a luncheon address hosted by the Louisiana Department of Natural Resources, John hop-scotched over an array of topics, including: the “re-emergence” of oil fields in the Gulf of Mexico, the effects of two recent hurricanes; exploration off the coast; presidential politics — and the football fortunes of LSU.

John said, for at least the next decade, there will be “an incredible opportunity for the re-emergence” of Louisiana’s offshore oil and gas industry — thanks to recent, record lease awards in the Gulf.

Since Oct. 7, the oil and gas industry has spent $7 billion “leasing water” (an industry term) for mineral rights in the Gulf’s Outer Continental Shelf, from 3-to-200 miles offshore.

“That’s just the leasing dollars,” John said. “The real dollars to state and the federal government are going to (come) in the production stage.”

Currently, the offshore oil industry provides Louisiana with $6.23 billion in direct benefits, a $1.5 billion payroll and 17,000 direct jobs, he said. Future benefits to the state from OCS leases will be — “off the charts.”

Eric Smith, a finance professor at Tulane University and director of the Tulane Energy Institute, is less sanguine.

“I don’t think it’s going to be an amazing renaissance but it’s going to be a healthy development,” Smith said.

Deepwater drilling programs should be productive in areas, 150 to 200 miles offshore of Louisiana, he said. However, the professor cautioned, “the oil is not good quality.”

Turning to weather woes, The Associated Press last week reported that hurricanes Gustav and Ike hammered small oil and gas producers in the Gulf, with insured losses for Ike alone expected to rise near $2 billion. During a two-week period, John said Tuesday, the back-to-back storms shuttered 28 refineries, from New Orleans to Corpus Christi, Texas.

“That means 45 percent of the refinery capacity of this country was shut down for two weeks,” he said.

Most of the energy industry on the Gulf Coast is “back on line,” John said, adding: “There have been no major spills in the OCS that we know of, as of yet. … I’m very proud of that.”

But environmentalist Darryl Malek-Wiley, a New Orleans-based organizer for the Louisiana chapter of the Sierra Club, says it’s too early for the oil and gas industry to celebrate.

“While we haven’t heard of any major spills, the fact that some oil rigs are still missing is of concern,” Malek-Wiley said, adding: “I always find it disingenuous of the oil industry to talk about oil spills when some scientists found that 60 percent of Louisiana coastal wetland loss can be attributed to oil and gas exploration and operations, which places Louisiana more at risk for storm surge.”

To reduce national dependence on foreign oil, John said that the nation needs to lift drilling bans in other areas, such as the coastal waters off the Florida coast — a proposal hotly resisted by environmentalists.

But John says Cuba has offered offshore oil leases to other foreign countries some 50 miles away from Key West, Fla. “Who has purchased (the leases)? We really don’t know yet.” John said. Officials of the island communist government are contemplating enlarging coastal areas for oil exploration, John said.

“That should make us — as Americans — very nervous in a lot of ways,” he said. “The Floridians don’t want us to drill off of their coast, but yet they are going to have drilling whether they like it or not because of this initiative by Cuba.”

Smith of Tulane says the Cubans are already drilling and the concessions are held by Canadian or Spanish companies. “We don’t know the quality of the Cuban crude because they haven’t found any yet.”

Storm Recovery Update

The US Minerals Management Service reported 225 of the 717 manned platforms and 7 of the 121 mobile rigs operating in the US sector of the Gulf of Mexico were still without crews as of midday Sept. 22. Officials said 76.6% of the oil and 65.5% of the gas usually produced from offshore federal leases have been shut in.

The Department of Energy said 9 refineries (total capacity of 2.27 million b/d) remain shut down as a result of Hurricane Ike, while another 12 refineries (total capacity of 2.95 million b/d) are running at reduced rates. Officials said 8 natural gas processing plants (total capacity of 5.08 bcfd) in Texas and Louisiana were shut down; another 14 plants (6.28 bcfd total capacity) were restarting or operating at reduced runs. Also, 7% of Texas remained without electrical power as of Sept. 22.

Shell Oil Co. now has returned 1,210 employees offshore and increased production over the weekend to 32,000 b/d of oil equivalent (total gross) from a few Shell-operated facilities. The company expects to ramp up production, "depending on repairs and downstream oil and gas infrastructure readiness."

Shell Pipeline said most of the Delta pipeline system is delivering crude. In its Central Gulf pipeline corridor, the Amberjack pipeline north of the South Timbalier 301 platform is back in service and flowing oil from limited production platforms. Work continues to restore other connecting pipelines. Mars and Ursa pipelines are standing by for prestart testing when associated production facilities are ready.

Company officials are developing plans to reroute the Auger pipeline system around the damaged Eugene Island 331 platform. As a temporary measure to bring production on quickly, Shell is looking at redirecting flow from the Auger pipeline to another system in the area.

The Eugene Island pipeline remains down pending repairs at a third-party pump station and attempts to isolate subsea connections to damaged producer platforms. The Boxer pipeline is down pending start-up of the Eugene Island pipeline and the closure of a sub-sea valve to isolate a damaged producer platform.

In the western pipeline corridor, Cougar pipeline is down pending repairs at a producer platform. Work is progressing to restart the Central Gulf gathering system.

Onshore, the Shell-operated Capline Crude Oil Pipeline System is operating generally at scheduled rates. Deliveries continue at limited rates into Port Arthur and Houston areas on the eastern end of the Houma-to-Houston Crude Oil System. Finished products systems in Houston have power and are making deliveries to connecting truck terminals and pipelines. In Port Arthur, finished product systems are using portable generators to make limited deliveries from inventory.

Shell's Deer Park, Tex., refinery and chemical plant are progressing toward restart with units being brought online in a planned and sequential manner. Production and distribution of motor fuels is expected to begin Sept. 23, with normal operating rates expected by this weekend.

Motiva Enterprises LLC (a Shell-Saudi Aramco joint venture) reported power has been restored at its Port Arthur refinery. Production of gasoline and other products is expected to begin this week. Meanwhile, workers continue to blend gasoline and diesel from existing inventories for shipments into the pipeline distribution system.

Motiva's Norco, La., refinery is operating at planned rates, and its Convent, La., refinery is making gasoline and other products at 90% of capacity. The company plans to return production to normal rates over the next couple of days.

Shell's chemical plant at Norco is operating at planned rates, as is its chemical facility in Mobile. The chemical plat at Geismar, La., is still in start up sequence and is supplying limited product to customers from existing inventory.

More Gulf oil, gas production restored after Ike

NEW ORLEANS — More than three fourths of oil production and more than half of natural gas production remained halted in the Gulf of Mexico nine days after Hurricane Ike slammed into Texas.

About 76.6 percent of oil production and 65.5 percent of natural gas production in the Gulf is on pause, the U.S. Minerals Management Service said today.

About 1.3 million barrels of oil and 7.4 billion cubic feet of gas are produced every day in the Gulf, according to MMS estimates.

The oil and gas industry is still sending personnel back to rigs and platforms that were evacuated for Ike.

As of 11:30 a.m. today, personnel were still evacuated from a 225 production platforms, or 31.4 percent of the 717 manned platforms in the Gulf, and seven rigs, or 5.8 percent of the 121 rigs operating in the Gulf.

GE releases pulsed eddy current test

The GE Pulsec from GE Sensing and Inspection Technologies is a compact, battery-powered, non-destructive test instrument.

It uses pulsed eddy current (PEC) technology to provide diagnostic imaging with excellent depth resolution It features a handheld x-axis encoded array probe to allow rapid surface inspection and direct imaging of large areas.

Pulsed eddy current technology offers advantages over conventional eddy current.

Its drive coil is excited by a broadband impulse that is rich in low frequencies, meaning the range of transient eddy currents produced is also rich in low frequencies.

These lower frequencies penetrate more deeply into a test material.

The time-based information can be gated to present a layer-by-layer C-scan, which is much easier to interpret than conventional eddy current displays.

The wide frequency and depth range of the instrument is much greater than that associated with conventional eddy current, which means that more information is generated for post-processing or for further analysis.

There is no need to select a specific frequency for every inspection.

The single optimum frequency required for subsequent inspection of any corrosion or cracks detected by the initial Pulsec PEC scan can be easily identified and the relevant single element coil probe can be fitted to the instrument.

Pulsec is powered by a dual lithium-ion battery pack, with a charged life of 6 hours, or via a 100/240V AC supply.

It offers many of the operating features associated with conventional flaw detectors.

It has a high visibility TFT colour screen to provide high-quality imaging.

The internal memory of 1GB and hard disk of 80GB offer onboard real-time analysis, data recording and storage.

Data can be transferred via USB or Ethernet for post-data analysis and reports are generated with image capture at customer-selected intervals.

An advanced lift-off algorithm allows scanning in real-world situations such as variations in paint thickness, surface roughness and other causes of lift-off.

Gulf Island Fabrication, Inc. Status on Hurricane Ike

HOUMA, La., Sep 18, 2008 (BUSINESS WIRE) -- Gulf Island Fabrication, Inc. today reported its assessment of damages to its facilities. The majority of the damage was caused primarily by rising waters from Hurricane Ike that moved through the Gulf Coast beginning late Friday, September 12, 2008, and was sustained by administrative office buildings in Louisiana. When flood waters began to recede Monday, September 15, 2008, office and essential yard personnel began performing various tasks to return the Company's corporate headquarters and all the Company's operating facilities (Gulf Island, L.L.C., Dolphin Services, L.L.C. and Southport, L.L.C.) to operating status. All Louisiana facilities' employees were allowed to return to work Wednesday, September 17, 2008, and the Company anticipates three of its four Louisiana yards fully operational by early next week. The Company's Louisiana West Yard will take an additional week to complete post hurricane clean-up and yard restoration.

The Company's Texas facilities received no storm related damage associated with Hurricane Ike, but had five days of loss productivity due to shut-down related to the storm.

Although all hurricane related damage is covered by insurance, the Company will experience three, possibly four, weeks of loss productivity at its Louisiana facilities. The Company has not determined the financial impact of this loss of productivity, but the majority of the affect will be realized in the third quarter.

Gulf Island Fabrication, Inc., based in Houma, Louisiana, is a leading fabricator of offshore drilling and production platforms, hull and/or deck sections of floating production platforms and other specialized structures used in the development and production of offshore oil and gas reserves. These structures include jackets and deck sections of fixed production platforms; hull and/or deck sections of floating production platforms (such as tension leg platforms ("TLPs")), SPARs, FPSOs and MinDOCs, piles, wellhead protectors, subsea templates and various production, compressor and utility modules, offshore living quarters, tanks and barges. The Company also provides offshore interconnect pipe hook-up, inshore marine construction, manufacture and repair of pressure vessels, heavy lifts such as ship integration and TLP module integration, loading and offloading jack-up drilling rigs, semi-submersible drilling rigs, TLPs, SPARs or other similar cargo onshore, and offshore scaffolding and piping insulation services and steel warehousing and sales.

SOURCE: Gulf Island Fabrication, Inc.

49 platforms destroyed by Ike

WASHINGTON (AP) — The Interior Department says at least 49 offshore oil or natural gas production platforms in the Gulf of Mexico were destroyed by Hurricane Ike, and some may not be rebuilt.

It said in an assessment Thursday that the platforms accounted for 13,000 barrels of oil and 84 million cubic feet of natural gas a day. There are more than 3,800 production platforms in the Gulf producing 1.3 million barrels of oil a day and 7 billion cubic feet of gas a day. Most remain shut down.

The department also said five gas transmission pipeline systems sustained damage, although the extent of damage is not yet known. The report said it's too early to say whether there have been any oil spills.

Swift Energy Updates Operations Following Hurricane Ike

HOUSTON--(BUSINESS WIRE)--Swift Energy Company (NYSE:SFY) announced today it has begun the resumption of production operations at its various fields affected by Hurricanes Gustav and Ike including the Newport area of Lake Washington where crews are working to bring field wide production online. Drilling operations will resume in Lake Washington and the surrounding area once contracted drilling rigs can navigate their return to the field.

Production operations have remained at or returned to pre-storm levels in the Company’s South Texas area, the South Bearhead Creek field in Beauregard Parish, LA and the Jeanerette field in St. Mary Parish, LA. Production in the Brookeland field in Jasper and Newton counties in Texas and the Masters Creek field in Vernon and Rapides Parishes in Louisiana will resume as soon as power is restored to third party processing facilities, which is expected to occur in the next few days.

The Company has also completed initial physical assessments of damage to its facilities and equipment, with repairs underway, in its coastal Louisiana properties, including the Lake Washington Field in Plaquemines Parish, Bay de Chene Field in Jefferson and Lafourche Parishes, and Horseshoe Bayou, Bayou Sale and Cote Blanche Island Fields, in St. Mary Parish.

Swift Energy currently expects that repairs and the resumption of full production in its fields, with the exception of Bay de Chene, will take from one to three weeks, depending on availability and deliverability of supplies, equipment, parts and other logistical items from third party providers, along with the availability of personnel and contractors. Updates to the Company’s guidance for production and costs will be provided in the near future after these fields have largely resumed production.

The Bay de Chene field experienced structural damage to its production facilities, and some production equipment in the field was damaged or destroyed. As a result, resumption of complete production operations in Bay de Chene will take longer than three weeks and could take several months. Bay de Chene production averaged approximately 3,700 Boe per day over the two weeks immediately prior to the hurricane shut-in.

Swift Energy’s Houston headquarters was closed in preparation for Hurricane Ike on Thursday, September 11, and all IT systems were transferred over to the Company’s alternate location and continued working throughout this period. The headquarters building experienced no significant damage and has had electricity restored to it. All IT systems have now been transferred back to Houston and are operational. The Company expects that its headquarters will officially open for business on Thursday, September 18.

On another matter, Swift Energy reported that the Company has no contractual counterparty exposure of any type to Lehman Brothers Holdings Inc. or any of its affiliates and subsidiaries.

Swift Energy Company, founded in 1979 and headquartered in Houston, engages in developing, exploring, acquiring and operating oil and gas properties, with a focus on onshore and inland waters oil and natural gas reserves in Louisiana and Texas. Over the Company’s 28-year history, Swift Energy has shown long-term growth in its proved oil and gas reserves, production and cash flow through a disciplined program of acquisitions and drilling, while maintaining a strong financial position.

EPL Discusses Impact of Hurricane Ike

NEW ORLEANS--(BUSINESS WIRE)--Energy Partners, Ltd. (“EPL” or the “Company”) (NYSE:EPL) today provided an operational update regarding the impact of Hurricane Ike on its production operations, including its preliminary damage assessment.

EPL safely evacuated all offshore personnel and shut in all production prior to the arrival of Hurricane Ike. The Company has completed an initial assessment of damage to its operated platforms in the Gulf of Mexico (“GOM”) following the hurricane. Indications are that EPL’s producing properties have suffered, at most, minor damage such as missing handrails, grating, navigational aids and instrumentation panels as a result of Hurricane Ike. Efforts to resume production from the Company’s fields are underway, however the fields are in many cases awaiting acceptance of production by third party pipelines and processing facilities. EPL expects to provide further updates on its operations and production timing as additional information becomes available.

In the Company’s South Timbalier (“ST”) area, most producing wells, platforms and facilities sustained minimal damage due to Hurricane Ike. The ST 46 field area suffered no damage due to Hurricane Gustav or Hurricane Ike and is ready to resume production, delayed only by damage to a third party pipeline. EPL is currently awaiting word from the operator of the pipeline when pipeline access will be restored. At the ST 26 and 41 field areas, the Company has begun necessary repairs primarily caused by Hurricane Gustav to allow production to resume. Once EPL completes these repairs, ST 26 has been cleared to resume oil production by the operator of the third party pipeline into which it flows, while production from ST 41 will be dependent on the same third party pipeline repair required for production to resume at ST 46.

The Company’s physical inspections in its East Bay field have indicated only minor repairs are needed to certain structures and pipelines in the field to enable production to resume. Crews are on location making the necessary repairs, which should allow production to begin ramping up this weekend.

Minimal impact to EPL’s western GOM area has been reported, and most of the Company’s production from its operated fields in this area is waiting on clearances from third party pipelines and processing facilities to resume flow.

EPL maintains insurance coverage for property damage due to windstorms with a per-storm deductible of $10 million. The Company believes that the repair costs associated with damage to EPL properties from both Hurricanes Gustav and Ike will each be less than the per-storm deductibles. EPL also maintains business interruption insurance on its ST 41, 42 and 46 properties, although the Company at this time does not anticipate making a claim as repairs are expected to be completed during the no claim period provided for under the policy.

EPL also commented that the Company has no natural gas hedges and only minimal crude oil financially settled hedges in place during this storm season. EPL also said that it has no counter-party exposure with Lehman Brothers.

Founded in 1998, EPL is an independent oil and natural gas exploration and production company based in New Orleans, Louisiana. The Company’s operations are focused along the U. S. Gulf Coast, both onshore in south Louisiana and offshore in the Gulf of Mexico.

Shell says Norco, Louisiana, refinery near normal

NEW YORK, Sept 17 (Reuters) - Shell Oil said on Wednesday its 220,000 barrel per day joint-venture Motiva oil refinery in Norco, Louisiana, would reach normal rates by the end of the day.

The refinery is one of four plants co-owned by Shell on the Gulf Coast that were shut or at reduced rates in the aftermath of hurricanes Gustav and Ike.

The company added that its 235,000 bpd Motiva refinery in Convent, Louisiana, would begin making gasoline and other products by the weekend as it worked to restore operations from Gustav.

The company's two Texas refineries shuttered by Hurricane Ike remain mostly down, with the 332,000 bpd joint-venture Deer Park oil refinery in Deer Park, Texas, expected to be at normal rates in 5-7 days.

Shell's 290,000 bpd Motiva refinery in Port Arthur, Texas, was still undergoing minor repairs with restart being assessed, the company said in a press release.

Motiva is a joint venture between Shell and Saudi Aramco and Deer Park is a joint venture between Shell and Mexican state oil company PEMEX. (Reporting by Richard Valdmanis)

Ike's toll on oil, gas rigs tallied

The following information comes courtesy of Jen DeGregorio at the New Orleans Times-Picayune:

Although Hurricane Ike appears to have gone easier on the offshore energy industry than Hurricanes Katrina and Rita, the tally of damage to production facilities has mounted as government regulators further patrol federal waters.

Ike demolished at least 28 of the 3,800 oil and gas platforms in the Gulf of Mexico, according to data released Tuesday afternoon by the Minerals Management Service, the federal agency that oversees offshore drilling. That is nearly three times the number of facilities thought demolished on Monday, although less than the 44 platforms destroyed by Katrina and 64 platforms totaled by Rita.

In addition, Ike destroyed three jack-up drilling rigs and severely damaged at least one other jack-up. The MMS also reported that two separate drilling rigs that were blown adrift on Sept. 13 were ultimately secured by tugboats.

Pride International Inc. reported Tuesday that one of its jack-ups went adrift in the Gulf and would likely result in a total loss for the company. It was unclear whether the MMS had included the Pride Wyoming in its rig count.

Although the MMS expects the casualty count from Ike to rise as the agency continues its inspections and gathers more information from the offshore industry, officials said last week's storm appears to have been less destructive than either of the 2005 hurricanes.

Mainly low-producing sites concentrated in shallow waters near the Louisiana shoreline, the destroyed platforms generated about 11,000 barrels of oil and 82 million cubic feet of gas per day. That is a relatively small share of the roughly 1.3 million barrels of oil and 7 billion cubic feet of gas drawn each day from the Gulf, which contributes about 25 percent of the oil and 15 percent of the natural gas produced domestically.

By comparison, Katrina and Rita tore through the deepest parts of the Gulf and mangled many of the country's highest-yielding offshore platforms.

Ike inflicted severe damage to other platforms and also battered natural gas pipelines, although the MMS could not offer details about the extent of such damage.

Meanwhile, offshore fuel production is still largely on hold more than four days after Ike pummeled the Gulf. On Tuesday, about 97 percent of oil and 84 percent of natural gas remained "shut-in," a term that describes the closure of underwater safety valves.

Production should pick up in the days ahead, as companies repopulate the 717 manned platforms in the Gulf. On Tuesday, 498 manned platforms remained vacant. Workers also remained evacuated from 71 of 121 rigs.

. . . . . . .

Jen DeGregorio can be reached at 504.826.3495 or jdegregorio@timespicayune.com

Shell Restarts Some Gulf of Mexico Oil, Natural Gas Output

Sept. 17 (Bloomberg) -- Royal Dutch Shell Plc said it has restarted 26,000 barrels of oil equivalent a day of oil and natural gas production in the eastern Gulf of Mexico.

The remaining output should be back online by next week, Shell, Europe's largest oil company, said in a statement on its Web site.

Shell is still assessing the damage to facilities in the western Gulf and expects drilling operations to start over the next day or two, the statement said. Production will begin over the same period and ramp up through next week.

The company has deployed 227 workers to the Gulf as of yesterday out of 550 workers total and they expect full staffing in the next day or two.

To contact the reporter on this story: Christian Schmollinger in Singapore at christian.s@bloomberg.net.

Last Updated: September 17, 2008 00:35 EDT

More U.S. oil refining capacity back online

Report from Forbes:

WASHINGTON, Sept 16 (Reuters) - The amount of oil refining capacity along the U.S. Gulf Coast that has been restored after hurricanes Ike and Gustav increased to 1.111 million barrels per day, the Energy Department said on Tuesday.

That was up from 845,763 bpd on Monday, according to the department. Chevron's 330,000 bpd refinery in Pascagoula, Mississippi, and Murphy Oil's 120,000 bpd refinery in Meraux, Louisiana, were back to normal, after operating with reduced runs, the department said.

A total of 14 refineries with a capacity of 3.573 million bpd, equal to one-fifth of total U.S. refining capacity, remain shut after the storms. That represents a loss of about 1.3 million bpd in gasoline production and 900,000 bpd in distillate fuel output, according to the department.

Separately, 23 natural gas processing plants along the Gulf Coast with a combined capacity of 11.29 billion cubic feet of gas a day were still shut due to hurricanes Ike and Gustav, the department said.

However, 10 plants with a capacity of 4.26 billion cubic feet of gas a day were operating at normal levels or reduced rates.

Another five plants with a capacity of 1.9 billion cubic feet a day were capable of restarting once electric power is restored or upstream gas flows resume, the department said.

Refiners, Producers May Take Weeks to Restore Output

Sept. 16 (Bloomberg) -- Texas refiners and Gulf of Mexico oil and gas producers may need two weeks to restore normal operations after Hurricane Ike swept through the region.

Exxon Mobil Corp., the world's biggest oil company, said its Beaumont, Texas, refinery took the ``most serious hit'' of its plants after Ike pushed ashore a wall of water. Chevron Corp. said ``several'' Gulf platforms were toppled and Royal Dutch Shell Plc restarted ``some production'' in the region.

``You are looking at 10 to 14 days for most of the refineries'' in the Houston and Texas City areas, Andy Lipow, president of Houston-based Lipow Oil Associates LLC, said in a telephone interview. ``Power and people are the major stumbling blocks for refineries to return.''

Fourteen Texas and Louisiana refineries, with combined crude processing capacity of 3.72 million barrels a day, were closed. The storm came ashore near Galveston Sept. 13, shutting about 20 percent of the U.S.'s oil-refining capacity.

``It's highly unlikely that we will see the bulk of these operations back to normal before a minimum of 10 days to two weeks,'' Tom Knight, trading director at Truman Arnold Cos., an independent wholesaler in Texarkana, Texas, said in an interview.

Pump Prices

Refinery outages are expected to reduce supply and boost gasoline prices. Regular gasoline at U.S. pumps rose 4.8 percent to $3.842 a gallon on Sept. 14 from a week ago, AAA, the nation's biggest motoring club, said on its Web site.

``Over the next two weeks the national average could get as high as $3.90 to $3.95 and then come back off,'' said Lipow.

BP Plc is assessing its Texas City refinery, Sheila Williams, a London-based spokeswoman, said by phone today. The company is ``working with the local authorities to restore the reliable water and electricity services,'' she said. The Texas City refinery is BP's largest, according to the company.

Exxon said it plans to ``later in the week'' restart units at its Baytown refinery, the largest in the U.S. Marathon Oil Corp.'s Texas City refinery is without power and water.

Valero Energy Corp., the largest U.S. refiner, said while power has been restored to most processing units at its Houston refinery, no units are running. ``We still need nitrogen, hydrogen, we have to pump water out of some areas,'' Bill Day, a company spokesman, said by telephone. ``There's a lot of issues we have to get through besides just power.''

Houston

Ike left Houston without drinking water and severed power to millions after ripping through America's fourth-largest city. It's the first storm to hit a major U.S. metropolitan area since Hurricane Katrina devastated New Orleans in 2005.

About 27 percent of CenterPoint Energy Inc.'s 2.26 million Houston customers had electricity by yesterday, the company said. Houston's electricity distributor has said it may take as long as four weeks for full power restoration.

Oil companies, which shut down most of their Gulf output for the storm, were examining Gulf assets for potential storm damage and beginning to return workers to rigs and platforms.

A total of 99.9 percent of oil production and 93.8 percent of gas output was idled in the Gulf, the U.S. Minerals Management Service said yesterday. Gulf fields produce 1.3 million barrels of oil a day, about a quarter of U.S. output, and 7.4 billion cubic feet of gas, 14 percent of the total, government data showed.

Recon Flights

Chevron, the second-largest U.S. energy company, said reconnaissance flights over its Gulf facilities showed damage from Ike, with ``several reported as toppled in the eastern and western shelf areas.''

More detailed assessments will be carried out and production will be restored in areas unaffected by the hurricane, Chevron said in a statement on its Web site.

BP ``expects to start production facilities over the next week, which is subject to availability of the export infrastructure,'' BP's Williams said. The company shut down output in the Gulf on Sept. 9. Ike has toppled the drilling derrick aboard BP's Mad Dog oil production platform, which ``is the most significant damage,'' she said.

Shell, Europe's largest oil company, said in a statement yesterday that it had redeployed 300 people to offshore oil and gas facilities. The company will continue to deploy workers until it reaches pre-storm staffing levels of 1,400 people, Darci Sinclair, a company spokeswoman, said.

``Redeployments to some locations in the Gulf of Mexico were hindered by a stalled cold front that was generating less than optimum flying condition,'' Shell said in a statement.

Mooring Failures

Noble Corp., the third-largest U.S. offshore oil driller, said two of its Gulf of Mexico platforms had ``mooring failures'' and have now been boarded by crews and power restored. No ``significant damage'' was found on the company's rigs and start-up operations are under way, Noble said in a statement late yesterday.

Exxon Mobil also said it was sending workers to Gulf oil and gas facilities that weren't in the direct path of the storm.

LyondellBasell Industries' Houston refinery will be down for at ``least several days,'' said company spokesman David Harpole. Shell said ``varying levels'' of services were available at its Deer Park, Texas, refinery and there was no electricity at its Port Arthur plant, which it operates in a joint venture with Saudi Arabia's state oil company.

Shell's Norco refinery in Louisiana was operating at 60 percent of capacity, while its Convent plant in the state was not yet producing gasoline and ``other products.''

Reduced Rates

Total SA, Europe's third-largest oil company, said its 240,000 barrel-a-day Port Arthur, Texas refinery is without electricity and wasn't flooded.

ConocoPhillips has begun to restart its Sweeny, Texas, refinery, the company said in a statement on its Web site. The company's Lake Charles refinery is operating at reduced rates and continues the restart process.

Pasadena Refining System Inc. said its Pasadena, Texas, refinery sustained relatively minor damage and is waiting for employees to return before it can restart, Chuck Dunlap, Pasadena's president, said in an e-mailed statement.

To contact the reporter on this story: Aaron Clark in New York at aclark27@bloomberg.net

Last Updated: September 16, 2008 05:44 EDT

Conoco says Belle Chasse refinery still down

NEW YORK, Sept 15 (Reuters) - ConocoPhillips (COP.N: Quote, Profile, Research, Stock Buzz) said on Monday its 195,000 barrel per day Alliance oil refinery in Belle Chasse, Louisiana, remained down after shutting more than two weeks ago prior to Hurricane Gustav.

The refinery has power and is preparing for restart, the company said in a press release.

ConocoPhillips added its 280,000 bpd Lake Charles, Louisiana, refinery remained at reduced rates after Gustav.

ConocoPhillips said that its 300,000 bpd Sweeny, Texas, refinery also had power in the wake of the more recent Hurricane Ike, but that it remains shut during an assessment of the facility's condition.

Ike damage to US oil sector seen limited so far

HOUSTON, Sept 15 (Reuters) - A big chunk of U.S. energy production shut by Hurricane Ike could restart within a week as initial reports showed the storm caused only minor damage to the nation's oil platforms and refineries.

Fuel supply disruptions are still possible in the meantime, as the shutdowns cut already threadbare gasoline inventories to their lowest levels on record, sending pump prices spiking.

The biggest hurdle for the oil industry probably will be restoring power supplies to refineries and pipelines after the storm raked southeast Texas Saturday and idled a quarter of U.S. crude and fuel production.

"As with Gustav, power availability (as well as reportedly limited supplies of steam and industrial gases at some plants) will be the main hurdle to clear before facilities can restart," J.P. Morgan wrote in a research note.

Some 16 oil refineries were left idled after the storm -- many of them cut off from power supplies -- making up just under a quarter of U.S. fuel production capacity, according to a Reuters survey.

So far, the only reports of damage to refineries include Shell's Deer Park plant near Houston and ConocoPhillips Alliance refinery in Belle Chasse, Louisiana -- part of which was flooded by Ike.

The U.S. Department of Energy said Sunday that Ike caused less damage than initially feared, but said even undamaged refineries could take a week to restore operations.

The American Petroleum Institute, Washington's main oil lobby, said it could take a couple of weeks to get the full U.S. energy industry back online.

U.S. retail gasoline prices have spiked more than 15 cents since Friday to $3.84 a gallon and energy analysts said they expect nationwide gasoline inventories to fall to their lowest on record in the storm's aftermath.

But crude oil futures fell more than $5 to $95.71 a barrel -- a sign retail prices could come back down -- as dealers bet production would rebound and as wider economic troubles dogged the demand outlook.

Offshore, oil and gas production remained mostly halted, according to the U.S. Minerals Management Service. The Gulf of Mexico is home to a quarter of U.S. oil production and 15 percent of its natural gas output.

Ike damaged or destroyed 11 offshore production platforms or drilling rigs, but so far there have been no big spills, the U.S. Coast Guard said Monday. There are about 3,800 energy structures in the Gulf of Mexico.

Shell Oil, the largest oil producer in the Gulf of Mexico, said it found "moderate damage" on some of its oil and gas production platforms but no major structural damage.

"The sell-off (in oil prices) is partly because Hurricane Ike hasn't done significant structural damage to oil facilities," said David Moore, analyst for Commonwealth Bank of Australia.

The restart of the swath of pipelines along the Gulf Coast that feed crude to refineries and fuel to markets in other parts of the country could also be slowed by electricity transmission problems, analysts said.

Ike left more than 2 million customers in Texas without power and the state's utilities said the recovery could take two or three weeks.

The Louisiana Offshore Oil Port, which funnels oil from tankers in the Gulf to coastal refineries, said Monday its shipments were were reduced by a lack of available electricity.

(Reporting by Erwin Seba, Bruce Nichols, Eileen O'Grady in Houston, Richard Valdmanis in New York Randall Mikkelsen in Washington; Editing by David Gregorio)

Enterprise Products Sees Minimal Ike Damage To Onshore Facilities

Sep 15, 2008 (financialwire.net via COMTEX) -- EPD | Quote | Chart | News | PowerRating -- September 15, 2008 (FinancialWire) -- Natural gas pipeline operator Enterprise Products Partners L.P. (NYSE: EPD | Quote | Chart | News | PowerRating) (Current Market Cap: US$11.66 Bil.) said that initial inspections by onsite field crews indicated minimal to no visible damage to its company operated onshore assets on the Texas and Louisiana Gulf Coast.

The company said it plans to begin aerial evaluations of the partnership's offshore platforms that were evacuated ahead of the storm, as well as certain of its onshore pipelines and facilities. Enterprise said that its headquarters, which is located in downtown Houston, did not sustain any noteworthy damage.

Enterprise said that the loss of commercial power at the company's facilities in Texas represents "the most significant challenge" facing the company. The company said it expects most of its facilities to "quickly" resume operations once power is restored.

Enterprise said it is in the process of deploying back up and temporary generators to restore limited service to certain of its assets. This includes the ability for Enterprise's storage facilities at Mont Belvieu, Texas to currently receive around 120,000 barrels per day of mixed natural gas liquids.

The company said that, among its operations in the eastern Gulf of Mexico, service and operations on its Independence Hub platform and Trail pipeline would resume on September 14. Enterprise said it plans to re-man the company's other offshore platforms beginning on September 15, after initial assessments are completed.

Houston-based Enterprise Products Partners is a provider of midstream energy services to producers and consumers of natural gas, NGLs, crude oil and petrochemicals. The company transports natural gas, NGLs, crude oil and petrochemicals through more than 35,000 miles of onshore and offshore pipelines.

Shell finds "moderate damage" offshore after Ike

NEW YORK (Reuters) - Shell Oil (RDSa.L: Quote, Profile, Research, Stock Buzz) said it found "moderate damage" at some of its Gulf of Mexico offshore production platforms in the wake of Hurricane Ike.

"We were able to get personnel on some of the platforms and found some amount of moderate damage, which is being assessed," the largest oil producer in the Gulf of Mexico said in a press release issued late Sunday.

The company said its restart of crude oil and natural gas production from its Gulf platforms will depend on required repairs as well as the readiness of pipelines and refineries to handle the production.

The company said it found no major structural damage to its facilities offshore.

(New York Energy Desk, 646-281-6056)

Gas prices spike due to Ike-related refinery outages

Compounding the devastation it wrought to the Gulf Coast, Hurricane Ike also shut down more than a dozen oil refineries in Texas, stymieing at least a fifth of U.S. production capacity.

And as the stoppage sparked spikes in gasoline prices throughout the Southeast, Long Island has seen a milder uptick - although some observers say the increases may not reflect actual shortages in the local supply chain.

"When prices start to escalate in our area, it's not necessarily a reaction to any real shortages," said Robert Sinclair Jr., AAA New York's media relations manager. "The effect should be really localized to the areas closest to the refineries" in the Gulf.

The average price per gallon for regular gas in Nassau and Suffolk edged up to $3.83 yesterday from Saturday's average of $3.76, AAA said in its fuel gauge report yesterday.

That's still well below the highest recorded average on Long Island: $4.35, on July 8.

The recent spike isn't retailers' fault, said Long Island Gasoline Retailers Association president Kevin Beyer, who owns Performance Fuels gas station in Smithtown. Over the past week, his local wholesale purveyor raised prices 40 cents a gallon.

"I've absorbed some of that cost," he said. By the end of last week, consumers at his station paid 25 cents more per gallon.

Still, to Kevin Henderson, a carpenter from Yaphank, the spike has been significant.

"I have seen a 40-cents-a-gallon or better increase in the last four days, and I get around the Island quite a bit," said Henderson, 54, of Yaphank, who paid $4 a gallon to fill his 2005 Ford Explorer at a Coram gas station yesterday. "They say the storm hit the Gulf and some refineries are shut down, but the gas that they're selling was manufactured six months ago," he added. "Any little hiccup in the Middle East, the Alaskan pipeline, the hurricane in the Gulf - it's just a reason to raise prices, and it's not right."

Late last week, the New York State Association of Service Stations and Repair Shops, an Albany-based trade group, expressed concern about the increase in wholesale gasoline prices to state Attorney General Andrew Cuomo's office, a spokesman said.

"The attorney general has and will continue to keep a close eye on the price of gasoline in an effort to prevent unscrupulous practices of any form," said spokesman John Milgrim. The office expected to issue a consumer alert today.

President George W. Bush said Saturday federal agencies would monitor gas prices to prevent gouging, as the Environmental Protection Agency suspended reformulated gas requirements to ease imports.

Also, the federal Department of Energy began yesterday to deliver more than 300,000 barrels of oil from the strategic petroleum reserve to two refineries in Illinois and Louisiana.

This story was supplemented with wire service reports.

Ike: Update on refineries and offshore facilities

The New Orleans Times-Picayune reports that energy production in the Gulf of Mexico remained largely shuttered Thursday as energy companies scrambled to complete evacuations and shut down refineries in advance of Hurricane Ike.

Roughly 97 percent of all oil production in the Gulf and 93 percent of all gas production is shut down, according to the Minerals Management Service, the federal agency that oversees drilling. Gulf energy production has not fully resumed since Hurricane Gustav struck Louisiana over a week ago.

Stone Energy, Shell, BP and Chevron Corp. have all evacuated their Gulf operations. In fact, some 78 percent of the platforms in the Gulf and 77 percent of the rigs have been evacuated. Platforms are the offshore structures from which oil and natural gas are produced. Rigs are offshore drilling facilities.

Port Fourchon, a hub from which about 60 percent of the drilling rigs along the Louisiana, Mississippi and Alabama coasts are served, shut down. So did the Louisiana Offshore Oil Port, which handles 13 percent of the nation's oil imports and is housed at Port Fourchon, also shut down.

In addition to offshore energy production, an estimated 12 percent of the nation's refining capacity was being shut in on Thursday. BP, Plc, ConocoPhillips, Exxon Mobil Corp. and Valero Energy shut down refineries from Texas City to Houston.

U.S. Refiners Accelerate Closings as Ike Strengthens

Sept. 12 (Bloomberg) -- U.S. refiners are speeding up plant closures as Hurricane Ike gathers strength toward the Texas Gulf Coast, home to 23 percent of domestic oil-processing capacity.

About 19 percent of U.S. refining capacity is being shut before Ike makes landfall today. Royal Dutch Shell Plc, Europe's largest oil company, started shutting down its Port Arthur, Texas, refinery because ``of shifts in Hurricane Ike's track,'' the company said on its Web site.

``Ike is headed into the heart of the refining industry,'' Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University in Dallas, said in an interview. ``The damage is likely to come in flooding, a lack of power for an extended period of time.''

Ike is forecast to ``become a major hurricane prior to reaching the coast,'' the U.S. National Hurricane Center said. Refiners including BP Plc, ConocoPhillips and Exxon Mobil Corp. are securing plants from Texas City, Texas to Houston.

A hurricane warning was issued from Morgan City, Louisiana, to Baffin Bay, Texas, after Ike strengthened to a Category 2 storm, the center said. The storm has sustained winds of 100 miles per hour (160 kilometers per hour) and ``strengthening is forecast during the next 24 hours.''

Houston Area

The Houston area's eight refineries have a processing capacity of 2.22 million barrels a day, which represents 13 percent of the U.S. total, according to their owners and the National Petrochemical and Refiners Association.

Shell operates the 285,000 barrels-a-day Port Arthur facility with Saudi Aramco through its joint venture Motiva Enterprises LLC.

Exxon Mobil began shutting its Baytown, Texas, plant, the largest in the U.S, with processing capacity of 590,500 barrels of oil a day. The Irving, Texas-based company started shutting down its 363,100 barrels-a-day Beaumont plant yesterday.

BP is closing its 475,000 barrel-a-day Texas City, Texas, refinery. ConocoPhillips, the second-largest U.S. refiner, said its 260,000 barrel-a-day refinery in Sweeny, Texas, is closing. LyondellBasell Industries, a unit of Access Industries Holdings LLC, is shutting its 299,300 barrel-a-day Houston refinery.

Biodiesel

GreenHunter Energy Inc., an alternative energy producer, said it will shut its Houston biodiesel plant, the largest such U.S. refinery, according to a Business Wire statement.

Valero Energy Corp., the largest U.S. refiner, shut three Texas oil refineries with a combined capacity of 700,000 barrels a day because of the danger posed by the hurricane.

Valero will close its 325,000 barrel-a-day Port Arthur, Texas, refinery, a Texas City plant with a capacity of 245,000 barrels and a Houston facility which can process 130,000 barrels, spokesman Bill Day said yesterday in an e-mail.

Marathon Oil Corp., the fourth-largest U.S. oil company, began to shut its Texas City refinery, which can process about 81,500 barrels of oil a day, according to the Energy Department.

Shell earlier said it was closing its Deer Park, Texas, plant. Deer Park refines 340,000 barrels a day of oil.

Port Closed

The U.S. Coast Guard closed Houston, the nation's largest petroleum port before the storm, according to a statement on its Web site. Ships, barges and tugs were ordered yesterday to leave the port or obtain Coast Guard permission to remain.

The storm ``could also impair the ability to import refined products because Houston is a major port,'' Bullock said. ``You have a double whammy here.''

The Louisiana Offshore Oil Port, the biggest U.S. oil- import terminal, shut marine operations as did Port Fourchon.

U.S. energy producers have idled about 97 percent of oil production and 93 percent of natural-gas output in the Gulf of Mexico, the Minerals Management Service said on its Web site.

Gulf fields produce 1.3 million barrels a day of oil, about a quarter of U.S. production, and 7.4 billion cubic feet a day of natural gas, 14 percent of the total, government data show.

Exxon Mobil, the world's biggest oil company, shut down Gulf wells as it evacuated offshore platforms. The company said yesterday that 26,000 barrels of daily oil production and 130 million cubic feet of gas output was halted. Chevron Corp., the second-largest U.S. energy company, evacuated all of its Gulf oil and gas production platforms and drilling rigs.

Creole Trail

Murphy Oil Corp. shut Gulf of Mexico production at two facilities, said Dory Stiles, a company spokesman, in an e- mailed statement. Hess Corp., the fifth-biggest U.S. oil producer, also said it has shut in all Gulf output.

Cheniere Energy Inc. is closing its Sabine Pass liquefied- natural-gas terminal and Creole Trail pipeline. Sabine can move up to 2.6 billion cubic feet per day of gas to Creole Trail and has 10 billion cubic feet of storage, according to Cheniere.

To contact the reporter on this story: Nidaa Bakhsh in London at nbakhsh@bloomberg.netChristian Schmollinger in Singapore at christian.s@bloomberg.net

Last Updated: September 12, 2008 07:18 EDT

Electricity restored to Conoco's La. refinery

HOUSTON, Sept 11 (Reuters) - Power has been restored at ConocoPhillips's (COP.N: Quote, Profile, Research, Stock Buzz) Alliance refinery in Belle Chasse, Louisiana, 10 days after Hurricane Gustav disrupted electric service to a dozen refineries, utility Entergy Corp (ETR.N: Quote, Profile, Research, Stock Buzz) said on Thursday.

On its website, Entergy said power had been restored to all 12 refineries affected by Gustav.

Conoco's Alliance was the only plant without the power needed to restart, Conoco and government officials have said.

Energy industry continues evacuating the Gulf of Mexico in advance of Hurricane Ike

The New Orleans Time-Picayune reports that the offshore energy industry continues to evacuate workers from the Gulf of Mexico in advance of Hurricane Ike.

As of late this morning, 96 percent of Gulf of Mexico oil production was shut in because of the approaching storm, according to the Minerals Management Service, the federal agency that oversees drilling. Approximately 73 percent of the Gulf's natural gas production has also been shut in.

BP and Stone Energy of Lafayette are in the process of completing their evacuations and shutting down their Gulf facilities today.

Shell has evacuated 193 offshore workers and plans to evacuate the remaining 47 by the end of the day on Thursday.

Some 63 percent of the platforms in the Gulf and 67 percent of the rigs in the Gulf have been evacuated. Platforms are the offshore structures from which oil and natural gas are produced. Rigs are offshore drilling facilities.

Power to return to ConocoPhillips's Alliance refinery by Monday

Wed Sep 10, 2008 7:32am EDT

HOUSTON, Sept 9 (Reuters) - Power is expected to be restored at ConocoPhillips's (COP.N: Quote, Profile, Research, Stock Buzz) Alliance refinery in Belle Chasse, Louisiana, no later than Monday, two weeks after Hurricane Gustav made landfall, utility Entergy Corp (ETR.N: Quote, Profile, Research, Stock Buzz) said on Tuesday.

Entergy spokesman Alex Schott said power was expected to be back on by Monday in Plaquemines Parish, south of New Orleans, where the 247,000 barrel per day (bpd) refinery is located.

Schott and other Entergy officials have declined to identify the refinery by name, although they have talked about the last refinery without power following Gustav.

Conoco's Alliance was the only plant without the power needed to restart as of Tuesday, Conoco and government officials have said.

"We're just hoping it gets up as soon as possible," said Conoco spokesman Bill Graham on Tuesday. "The date keeps changing. It's up to Entergy. Whatever they say. We're hoping sooner rather than later."

A dozen refineries were forced to shut in advance of Gustav's landfall in south Louisiana.

Conoco reported no significant damage at the refinery from Gustav.

One week after the storm, Entergy has restored power to 82 percent of its Louisiana customers that lost service, the company said Tuesday. But officials warned that the pace of restoration work will slow as workers move to the hardest-hit areas near Baton Rouge and along the Louisiana coast where the storm came ashore.

Some areas are not expected to have power before Oct. 1, according to the utility's web site.

Schott said the company is using a Chinook helicopter on loan from the Ohio National Guard to move heavy equipment into marshy areas to speed the recovery effort. (Reporting by Eileen O'Grady and Erwin Seba).

Gulf oil workers evacuate for Ike

HOUSTON (AP) -- Oil companies are evacuating their offshore facilities in the western Gulf of Mexico as Hurricane Ike approaches.

Ike is compounding earlier closures because of Hurricane Gustav. The new storm is expected to make landfall in south Texas this weekend and refineries along the coast are being secured. Exxon, Mobil and Shell are among the companies evacuating their workers from oil platforms.

Hurricane Gustav caused the shut-down of a dozen refineries about a week ago. And it halted almost all oil and natural gas production in the Gulf.

But the federal agency that overseas offshore activity says Ike has a "favorable path" that will most likely miss the Gulf areas with the most production facilities. Instead, refining complexes along the Texas coast seems more at risk.

Gulf oil production stands at about 23 percent today, up slightly from yesterday. But that figure could drop as producers continue to shut down facilities for Ike.

So far, Ike and Gustav have not caused significant increases in energy prices.

Refineries Restart

The following was reported by the New Orleans Times-Picayune: Motiva Enterprises, a joint venture of Royal Dutch Shell and Saudi Arabi's state oil company, said Monday that its Norco refinery is increasing production rates to normal after closing in preparation for Hurricane Gustav. The refinery can process 236,400 barrels of oil a day. Valero Energy Corp. also said that it had restarted the main processing units at its refinery in St. Charles Parish over the weekend. The company also returned its refineries in Houston, Texas City and Port Arthur to "planned rates," a company spokesman said by e-mail.

Hurricane Ike May Spare Gulf Oil Platforms as Forecast Changes

Sept. 9 (Bloomberg) -- Hurricane Ike may hit southern Texas in four days, sparing the largest U.S. oil ports, Louisiana, and offshore platforms shut since Hurricane Gustav, forecasters said.

A high-pressure ridge across the Gulf of Mexico will direct Ike toward the west in about two days, the U.S. National Hurricane Center said in a statement at 5 a.m. New York time.

``New Orleans and Louisiana are now out of the woods,'' Jim Rouiller, senior energy meteorologist for Planalytics.com in Wayne, Pennsylvania, said today in an e-mailed message. ``This more southerly track toward southern Texas will keep a large majority of the energy production region out of harm's way.''

Mexican offshore production may be suspended, although Ike won't cause significant damage to platforms should it follow the forecast track to their north, Rouiller said.

The Louisiana Offshore Oil Port, the biggest U.S. offshore oil-import terminal, reopened Sept. 5 after being shut before Hurricane Gustav hit Louisiana Sept. 1. Prior forecasts had Ike moving through oil-producing regions off the coast of Texas and menacing Houston, the largest U.S. petroleum port.

Energy companies reported 15 rigs and 200 production platforms are evacuated, the Minerals Management Service said yesterday in a statement on its Web site. About 1 million barrels of daily oil production and 4.7 billion cubic feet of gas remained shut in.

The revised forecasts came as crude oil fell in New York following a comment by Saudi Arabian oil minister Ali Al-Naimi in Vienna that supplies are ``well-balanced.''

Ike's center was 40 miles (65 kilometers) south of Havana, Cuba, at 8 a.m. New York time today, the National Hurricane Center said. It had weakened overnight to a Category 1 hurricane, with maximum sustained winds of almost 80 miles (130 kilometers) an hour.

The National Hurricane Center cautioned that five-day hurricane forecasts, including the one today showing Ike making landfall Saturday north of Brownsville, Texas, are unreliable. Just a few days ago, the five-day forecast had the storm turning northwest from the Caribbean into Florida, the center said.

To contact the reporter on this story: Jim Polson in New York at jpolson@bloomberg.net.

Last Updated: September 9, 2008 08:51 EDT

Shell Keeps Staff Onshore for Ike as Refinery Repairs Continue

Sept. 7 (Bloomberg) -- Royal Dutch Shell Plc, Europe's largest oil company, delayed deploying most staff back to offshore platforms in the Gulf of Mexico because of an approaching hurricane.

The company has returned about 615 people to offshore facilities in the aftermath of last week's Hurricane Gustav and a ``small amount'' of production has been started again, it said in a statement yesterday.

Gustav came ashore about 85 miles (136 kilometers) southwest of New Orleans on Sept. 1, with winds that toppled electricity lines, causing widespread blackouts. While Exxon's Baton Rouge refinery, Louisiana's largest, was forced to shut that day because of a loss of power, damage to oil installations in the region was less than forecast.

``Shell is not, at this time, redeploying all personnel (approximately 1,400) who were evacuated prior to Gustav because of the possibility that Hurricane Ike might enter the Gulf of Mexico next week and require another evacuation,'' the statement said.

Ike was east of Great Inagua Island, Bahamas, at 8 a.m. local time and is projected to move west across Cuba and into the gulf over the next two days, according to the U.S. National Hurricane Center.

Shell's pipelines in the region didn't suffer any significant damage from Gustav, and most of them will be ready for service by today, The Hague-based Shell said in another statement. The Capline crude-oil pipeline, which connects Louisiana crude terminals with Midwest refiners, has begun to operate, using local utility power.

Refinery Power

A pipeline linking Houma, Louisiana, and Houston, was expected to have nearly all capabilities restored by today.

The Motiva Enterprises LLC refinery in Norco, Louisiana, shut by Gustav, had power service restored and was expected to resume some gasoline production as of today, Shell, a partner in the Motiva joint venture with Saudi Aramco, said yesterday.

At Motiva's refinery in Convent, Louisiana, which was also shut, power from the local utility is being used and ``repairs to internal power lines and other facilities are progressing,'' Shell said. The ``initialization'' of some Convent refinery units could begin next week, Shell said yesterday.

Fields in the Gulf produce 1.3 million barrels a day of oil, about a quarter of U.S. production, and 7.4 billion cubic feet a day of natural gas, 14 percent of the total, government data show.

Hurricane Katrina in 2005 closed 95 percent of regional offshore output and, along with Hurricane Rita, idled about 19 percent of U.S. refining capacity.

To contact the reporter on this story: Stephen Voss in London at sev@bloomberg.net

Conoco says no big storm damage at Alliance plant

NEW YORK, Sept 4 (Reuters) - ConocoPhillips (COP.N: Quote, Profile, Research, Stock Buzz) said on Thursday that its 195,000 barrels per day Alliance oil refinery in Louisiana has not been significantly damaged as a result of Hurricane Gustav but remains shut.

"Power remains out at the Alliance refinery in Belle Chasse, La., and the refinery remains shut down," the company said in an update posted on its website.

"Preliminary assessments indicate that there is no significant damage at the Alliance refinery," it added.

Conoco's 280,000-bpd Lake Charles, Louisiana refinery, which was being restarted since Wednesday, will operate at reduced rates during the restart period, estimated to last between 10 and 14 days, the company said.