Sign in to comment!

Menu
Home

Gov't: Much of Gulf Energy Output Back by End-Oct

It may take until the end of October for U.S. oil and natural gas production in the Gulf of Mexico to return to near pre-Hurricane Katrina (search) levels, but it will take even longer for that much production to make it to the market, the U.S. government said Friday.

Offshore energy companies will have the ability to produce at about 90 percent of pre-storm oil and gas output in 30 to 40 days, said Johnnie Burton, director of the Interior Department's Minerals Management Service (search).

But some of it won't be able to make it to wholesale market for as much as three months due to pipeline problems and shutdowns of oil refineries and gas processing plants, Burton told reporters at a new briefing.

She said the oil and gas is not "going to go anywhere if the infrastructure that receives it is not up."

"There are refineries that are not ready to take the product at the end of the pipe. So it's not just the pipes that's the problem, it's everything at the end of the pipe also," Burton said.

U.S. crude oil prices fell more than $1 to below $64 a barrel on Friday on news that Katrina did not cause major damage to underwater pipelines in the Gulf.

Katrina churned through the Gulf of Mexico (search) with winds of up to 140 miles per hour before slamming into Louisiana and Mississippi on August 29. The storm destroyed some 46 producing platforms in the Gulf and extensively damaged 20 others.

The amount of Gulf of Mexico oil and gas that will be sent to market once more delivery and receiving facilities are working will not reach 90 percent of pre-hurricane production levels for several months, Burton said.

More than 56 percent of crude production and 34 percent of gas output in the Gulf of Mexico remained shut in, according to U.S. government data.

Among those damaged was Shell Oil's giant Mars platform, in deepwater off the coast of Louisiana. Shell, one of the largest producers in the Gulf of Mexico, last week warned that oil and gas output from its vast Mars field might not resume flowing until 2006.

The Gulf of Mexico accounts for about a third of total domestic oil production and one-fifth of gas output, according to the MMS. The agency oversees offshore energy production.