Gulf Production Already Shut In Ahead of Tropical Storm Helene

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Written by Daniel Graeber for Industrial Info Resources (Sugar Land, Texas)--Energy companies working in the Gulf of Mexico already shut in some production ahead of Tropical Storm Helene, which is expected to hit Florida as a major hurricane later this week.

A hurricane warning was in effect for the Anclote River to Mexico Beach, Florida. The National Hurricane Center said Tuesday that hurricane conditions are possible for parts of Mexico and Cuba as early as Wednesday.

"Hurricane conditions are possible within the U.S. watch areas late Wednesday and early Thursday," the forecast read.

Warnings for the storm show it could strengthen to a hurricane as early as Wednesday as it passed between Cuba and the Yucatan Peninsula of Mexico. By Thursday, it could be a major hurricane and reach the Big Bend coast of Florida.

By Monday, however, Industrial Info was already hearing word that some operators were pulling non-essential staff off their platforms and rigs in the U.S. territorial waters of the Gulf of Mexico.

"In preparation for Potential Tropical Cyclone Nine, Chevron Corporation (NYSE:CVX) (San Ramon, California) has begun evacuating all personnel from our Blind Faith and Petronius platforms and is shutting in the facilities," Paula Beasley, a spokesperson for Chevron, told Industrial Info on Monday, before the storm strengthened. "While we are also transporting non-essential personnel from our four other Chevron-operated Gulf of Mexico platforms, production there remains at normal levels."

Industrial Info by Tuesday was able to confirm that production from both Blind Faith and Petronius was shut in because of the storm, sidelining around 125,000 barrels per day (BBL/d) in production from Chevron.

From BP's (NYSE:BP) (London, England), Industrial Info's data show production is shut in at the Na Kika and Thunder House platforms, which combine for 222,000 BBL/d. Production at the Atlantis and Argos platforms is curtailed, though its Mad Dog facility was operating normally as of Tuesday.

Production from the Gulf of Mexico is expected to average 1.8 million BBL/d during the third quarter, according to federal estimates. Hurricane Francine, which made landfall in Louisiana last month, sidelined about 42% of total Gulf production at its peak.

The Bureau of Safety and Environmental Enforcement (BSEE), an offshore regulator, issued its last update on the impact from Francine last week, noting about 5% of offshore oil production was still offline as of September 17.

The Gulf of Mexico accounts for about 10-15% of total U.S. crude oil production, though it's only a marginal natural gas producer.

If it forms into a hurricane as expected, the storm would largely avoid the dense network of refineries, export terminals and production centers that pepper the U.S. Gulf Coast. Florida, which has no refineries of its own, is expected to take the brunt of the storm.

Florida's west coast was devastated by Hurricane Ian, a Category 5 hurricane that left more than 2.8 million people without power after it made landfall in September 2022. More than a dozen fuel terminals were closed as well, representing more than 8 million barrels of gasoline, diesel and jet fuel storage capacity.

Rail lines were impacted too, with CSX (NYSE:CSX) (Jacksonville, Florida) closing some intermodal terminals and railyards due to the extensive storm damage in Florida.

Florida Governor Ron DeSantis had declared a state of emergency for Helene by Monday. Another storm off the coast of West Africa has a 40% chance of developing into a cyclone within 24 hours.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).