Was Katrina as destructive as Ivan?

Sam Fletcher
Senior Writer

Just hours after Katrina, a category 4 hurricane, roared ashore 70 miles south-southeast of New Orleans on Aug. 29, analysts were speculating whether the storm's residual damage might be as bad as the highly destructive Hurricane Ivan nearly a year earlier.

There were no immediate reports of damage by Katrina to Gulf Coast production facilities or refineries, although Transocean Inc. reported its moored Deepwater Nautilus semisubmersible rig had drifted off location during the storm.

Still, Katrina's path took it "through a greater portion of the Gulf of Mexico oil and gas patch" than did Ivan, said analysts in the Houston office of Raymond James & Associates Inc. "Specifically, Hurricane Ivan skirted the eastern part of the Gulf of Mexico production area, affecting primarily the deepwater production areas. Katrina, however, has taken a more westerly path and looks to have impacted the central gulf region, which is closer to the heart of the producing area."

The analysts said, "While on the surface Hurricane Katrina's impact looks like it could be more significant than Hurricane Ivan's impact last year, a better picture of infrastructure damage and production curtailments from the storm will be available within a few days."

Ivan entered the gulf on Sept. 13, 2004, and destroyed 7 offshore platforms, damaged 24 others, and wrecked segments of 102 pipelines before making landfall near the Louisiana-Mississippi border on Sept. 16. Nearly 5 months later on Feb. 14, with repairs still under way, officials at the US Minerals Management Service estimated that Ivan forced operators to shut in a cumulative 43.8 million bbl of oil and 172 bcf of natural gas, the biggest storm-related production curtailment in the gulf's history.

Ivan also forced the evacuation of 69 rigs, 60% of the units working in the gulf at that time, and 575 production platforms, 75% of the gulf's total.

MMS estimated that Ivan produced a 52-ft significant wave height (equivalent to a theoretical 90-ft maximum wave height), the highest ever reported in the Gulf of Mexico, according to National Oceanic and Atmospheric Administration (NOAA) records. MMS said waves higher than 52 ft were likely although not measured in that storm, with damage to some platforms suggesting wave crests of at least 60-65 ft (equivalent to a wave height of at least 90 ft) above sea level.

Katrina underestimated
Meteorologists and commodity market traders underestimated Katrina on Aug. 26, when the then much-weaker storm was moving slowly toward southeast Florida. The MMS regional office in New Orleans reported only 12 production platforms and 9 drilling rigs in the Gulf of Mexico were evacuated, with no production shut in at that time.

Prices for crude and petroleum products plummeted on futures markets in New York and London since Katrina apparently posed no serious threat to oil and gas production in the Gulf of Mexico. The October contract for benchmark US light, sweet crude plunged by $1.36 to $66.13/bbl that day on the New York Mercantile Exchange.

But after crossing Florida and entering the gulf, Katrina quickly grew into a category 5 hurricane as it headed toward the central gulf. Offshore operators stepped up evacuations and began shutting in production over the weekend. By Aug. 28, the MMS regional office had moved to its emergency facility in Houston as the result of emergency evacuation of low-lying New Orleans.

As of Aug. 29, MMS said, 615 offshore platforms and 96 rigs were evacuated, with 1.4 million b/d of oil and 8.3 bcfd of natural gas shut in. Cumulative production lost to Katrina through that date totaled 3.1 million bbl of oil and 15.4 bcf of natural gas.

Even before MMS reported that information, however, the October crude contract jumped to a record $70.80/bbl in overnight electronic trading Aug. 29 on NYMEX—the biggest one-time gain for a front-month contract in 29 months.

Only a week before the US Labor Day holiday, which marks the official end of the summer driving season, industry sources estimated as much as 1.5 million b/d of refining capacity may have been shut down by the storm. "Valero Energy Corp. evacuated all but a few workers at its 260,000 b/d St. Charles refinery on [Aug. 27]. ConocoPhillips shut its 247,000 b/d Alliance refinery; Murphy Oil Corp. shut down its 120,000 b/d Meraux, La., refinery; and ExxonMobil planned to shut down its 183,000 b/d refinery in Chalmette, La," said James K. Wicklund in the Houston office of Banc of America Securities.

Some observers say gulf production still hasn't fully recovered from Ivan's damage. If Katrina proves to be as destructive, it will reduce energy supplies and increase prices.

(Online Aug. 26, 2005; author's e-mail: samf@ogjonline.com)

Related Articles

Lukoil taps new blending technology for Russian refinery

07/09/2015 OAO Lukoil has selected Honeywell Process Solutions (HPS), a division of Honeywell International Inc., to provide process control technology design...

PDO to use solar to displace gas in thermal EOR work

07/09/2015

Petroleum Development Oman (PDO) plans to use a solar plant to displace natural gas in enhanced oil recovery (EOR) efforts in Amal oil field.

Ending crude export ban would help rural US areas, House panel told

07/09/2015 Rural US communities generally have benefited from the nation’s crude oil production renaissance, and potentially could be helped more if restricti...

Husky Energy reports unplanned maintenance at Lloydminster upgrader

07/08/2015

Husky Energy Inc. reported unplanned maintenance at its Lloydminster heavy oil upgrader in Saskatchewan.

Stone confirms oil pay with Cardona development well in deepwater gulf

07/08/2015 Stone Energy Corp., Lafayette, La., encountered 288 ft of net pay in two intervals with its Cardona No. 6 development well on Mississippi Canyon Bl...

ORPIC lets contract for Sohar refinery expansion

07/08/2015 Oman Oil Refineries & Petroleum Industries Co. (ORPIC), through a contractor, has let a contract to Metso Corp., Helsinki, to supply valve tech...

EIA: US oil output fell 50,000 b/d in May

07/07/2015 Total US crude oil production dropped 50,000 b/d in May compared with April and is expected to continue falling through early 2016 before growth re...

Croatian refinery lets contract for upgrading project

07/07/2015 Croatia’s INA Industrija Nafte DD (INA) has let a contract to Findland’s Neste Jacobs Oy to provide project management consultancy (PMC) for a resi...

Cidade de Itaguai FPSO anchors in Lula field

07/07/2015 Petroleo Brasileiro SA (Petrobras) reported that the Cidade de Itaguai floating production, storage, and offloading vessel has arrived at the Irace...
White Papers

UAS Integration for Infrastructure: More than Just Flying

Oil and gas companies recognize the benefits that the use of drones or unmanned aerial systems (UAS) c...

Solutions to Financial Distress Resulting from a Weak Oil and Gas Price Environment

The oil and gas industry is in the midst of a prolonged worldwide downturn in commodity prices. While ...
Sponsored by

2015 Global Engineering Information Management Solutions Competitive Strategy Innovation and Leadership Award

The Frost & Sullivan Best Practices Awards recognise companies in a variety of regional and global...
Sponsored by

Three Tips to Improve Safety in the Oil Field

Working oil fields will always be tough work with inherent risks. There’s no getting around that. Ther...
Sponsored by

Pipeline Integrity: Best Practices to Prevent, Detect, and Mitigate Commodity Releases

Commodity releases can have catastrophic consequences, so ensuring pipeline integrity is crucial for p...
Sponsored by

AVEVA’s Digital Asset Approach - Defining a new era of collaboration in capital projects and asset operations

There is constant, intensive change in the capital projects and asset life cycle management. New chall...
Sponsored by

Transforming the Oil and Gas Industry with EPPM

With budgets in the billions, timelines spanning years, and life cycles extending over decades, oil an...
Sponsored by

Asset Decommissioning in Oil & Gas: Transforming Business

Asset intensive organizations like Oil and Gas have their own industry specific challenges when it com...
Sponsored by
Available Webcasts


The Resilient Oilfield in the Internet of Things World

When Tue, Sep 22, 2015

As we hear about the hype surrounding the Internet of Things, the oil and gas industry is questioning what is different than what is already being done. What is new?  Using sensors and connecting devices is nothing new to our mode of business and in many ways the industry exemplifies many principles of an industrial internet of things. How does the Internet of Things impact the oil and gas industry?

Prolific instrumentation and automation digitized the industry and has changed the approach to business models calling for a systems led approach.  Resilient Systems have the ability to adapt to changing circumstances while maintaining their central purpose.  A resilient system, such as Maximo, allows an asset intensive organization to leverage connected devices by merging real-time asset information with other critical asset information and using that information to create a more agile organization.  

Join this webcast, sponsored by IBM, to learn how about Internet of Things capabilities and resilient systems are impacting the landscape of the oil and gas industry.

register:WEBCAST



On Demand

Taking the Headache out of Fuel License and Exemption Certificates: How to Ensure Compliance

Tue, Aug 25, 2015

This webinar, brought to you by Avalara, will detail the challenges of tax document management, as well as recommend solutions for fuel suppliers. You will learn:

-    Why it’s critical to track business partner licenses and exemption documents
-    The four key business challenges of ensuring tax compliance through document management
-    Best practice business processes to minimize exposure to tax errors

register:WEBCAST


Driving Growth and Efficiency with Deep Insights into Operational Data

Wed, Aug 19, 2015

Capitalizing on today’s momentum in Oil & Gas requires operational excellence based on a clear view of what your business data is telling you. Which is why nearly half* of oil and gas companies have deployed SAP HANA or have it on their roadmap.

Join SAP and Red Hat to learn more about using data to drive process improvements and identify new opportunities with the SAP HANA platform running on Red Hat Enterprise Linux. This webinar will also show how your choice of infrastructure impacts the performance of core business applications and your ability to achieve data-driven insights quickly and reliably.

*48% use SAP, http://go.sap.com/solution/industry/oil-gas.html

register:WEBCAST


OGJ's Midyear Forecast 2015

Fri, Jul 10, 2015

This webcast is to be presented by OGJ Editor Bob Tippee and Senior Economic Editor Conglin Xu.  They will summarize the Midyear Forecast projections in key categories, note important changes from January’s forecasts, and examine reasons for the adjustments.

register:WEBCAST


Emerson Micro Motion Videos

Careers at TOTAL

Careers at TOTAL - Videos

More than 600 job openings are now online, watch videos and learn more!

 

Click Here to Watch

Other Oil & Gas Industry Jobs

Search More Job Listings >>
Stay Connected