The Bad That Came From Hurricane Dennis (So Much For Deep Water Drilling)

[Strelnikov_]

Gonna be fun keeping those (highly touted) deep water rigs afloat in the era of global warming. This one could hurt.

HOUSTON -(Dow Jones)- The damage at BP Plc's (BP) (BP) giant Gulf of Mexico Thunder Horse platform in the wake of Hurricane Dennis will defer for at least 3-6 months 25,000-45,000 barrels a day of oil that was supposed to hit world oil markets late this year, according to Pickering Energy Partners, a Houston energy research firm. Thunder Horse, the largest oil and gas discovery in the history of the Gulf of Mexico, has been built to reach peak production of 200,000 barrels of oil and 200 million cubic feet of natural gas per day. The massive project is currently being installed in a remote area of the Gulf of Mexico, and was supposed to hit first oil in the third or fourth quarter of 2005.

Reasoning that "work on something this huge doesn't happen overnight," Pickering said the "best case" outcome would be a 3-6 month delay in the startup. "Worst case is back to the drawing board, which would take years," Pickering said. The Gulf of Mexico currently producers a total of 1.5 million barrels and 10 billion cubic feet of natural gas per day, so a lenghty delay to Thunder Horse would significantly alter the production outlook for the short-to-medium term. A BP spokesman said it was too early to estimate the damage's impact on the production schedule.

NEW YORK, July 11 (Reuters) - Oil company BP (BP.N: Quote, Profile, Research) said on Monday its Thunder Horse platform in the Gulf of Mexico, the largest new oil facility planned in the Americas through 2007, was listing an estimated 20-30 degrees following the passing of Hurricane Dennis.

BP spokesman Ronnie Chappell told Reuters that the listing could be due to excess water in ballast tanks due to Hurricane Dennis and not a result of major structural damage. Operator BP had planned to begin production of 250,000 barrels per day of oil and 200 million cubic feet of natural gas from the platform in late 2005.

Chappell could not say if the listing would prevent inaugural production. "I don't think we know enough yet to say to say how this would affect the start of the field." He said workers were monitoring the platform and determined Monday afternoon that the listing was not getting any worse.

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[bullimiami]

1. piss poor engineering not to build it to withstand

hurricanes that are sure to come eventually.

[bemildred]

2. You have to wonder ....

What the bottom line quantity of oil is that it is going to take to get this oil out of the gulf.

[KoKo]

3. And the reports were on CNBC that Dennis had not harmed our

"oil" supply...Golly Gee, Great News...but our potential Natural Gas Supplies were NOT mentioned. :D How they do spin and conveniently leave things like this out. I wouldn't have known about this if I hadn't seen it on DU. :-(

[Strelnikov_]

4. Kinda Changes My Perspective On The Crash Scenario From 'Oil Storm'

Looks like a Hurricane could play hell with supplies this tight.


Oil Gains as Gulf of Mexico Storms Probably Cut U.S. Supplies

http://quote.bloomberg.com/apps/news?pid=10000006&sid=aNBTYjsvXN14&refer=home

July 12 (Bloomberg) -- Oil prices rose for the first session in four after the U.S. government reported that as much as 96 percent of production in the Gulf of Mexico was shut by Hurricane Dennis.

``The oil production losses reported by the government were higher than people expected,'' said Phil Flynn, vice president of risk management with Alaron Trading Corp. in Chicago. ``If we lost that much with Dennis, people are worried about what's going to happen with the next storm.''

Tropical Storm Emily, the fifth storm since the June start of the hurricane season, formed in the Caribbean and could reach the Gulf next week. Daily production from the Gulf was down 858,000 barrels as of noon, according to the U.S. Minerals Management Service. Companies were returning crews to Gulf facilities, source of 30 percent of U.S. oil production.