U.S. oil firms cut nearly a third of Gulf of Mexico output ahead of storm

FILE PHOTO: A massive drilling derrick is pictured on BP's Thunder Horse Oil Platform in the Gulf of Mexico, 150 miles from the Louisiana coast, May 11, 2017. REUTERS/Jessica Resnick-Ault/File Photo

By Collin Eaton and Erwin Seba

HOUSTON (Reuters) – U.S. oil producers on Wednesday cut nearly a third of offshore Gulf of Mexico crude output as what could be one of the first major storms of the Atlantic hurricane season threatened production.

Fifteen oil production platforms and four rigs were evacuated in the north central area of the Gulf of Mexico, according to the U.S. Bureau of Safety and Environmental Enforcement (BSEE), ahead of a storm expected to become a hurricane by Friday.

Exxon Mobil Corp, Chevron Corp, Anadarko Petroleum Corp and others withdrew staff, and some cut production from deepwater platforms as a safety precaution.

The withdrawals helped push U.S. oil futures up 4% to more than $60 a barrel, and lifted gasoline prices. The U.S. Gulf of Mexico produces 17% of U.S. crude oil and 5% of natural gas. Gasoline futures climbed more than 3.5% in New York trading.

A tropical depression is expected to form in the Gulf by Thursday, with the potential to strengthen to a hurricane by the weekend, according to the National Hurricane Center. The system could produce a storm surge and heavy rainfall from Louisiana to the upper Texas coast.

Louisiana Governor John Bel Edwards on Wednesday declared a state of emergency, warning that the storm system could bring up to 15 inches of rain and hurricane-force winds to parts of Louisiana. A state of emergency allows for the activation of the state’s National Guard and the setting of curfews.

The Atlantic hurricane season runs from June through November.

BSEE said more than 600,000 barrels per day of Gulf oil production and 17% of the region’s natural gas production were shut by producers.

Exxon has evacuated nonessential staff from three platforms in the Gulf, but anticipates little effect on its production, spokeswoman Julie King said.

Anadarko, the third largest U.S. Gulf producer by volume, said it is stopping oil and gas production and removing workers from its four central Gulf facilities: the Constitution, Heidelberg, Holstein and Marco Polo platforms. It said it is also evacuating nonessential staff from eastern Gulf platforms.

Royal Dutch Shell Plc expanded an earlier offshore evacuation to seven platforms and shut more production, the company said on Wednesday.

Operations at the Louisiana Offshore Oil Port, the only U.S. port where the largest crude tankers can load and unload, were normal on Wednesday morning, a spokeswoman said.

Oil refiners Motiva Enterprises and Marathon Petroleum Corp said they were monitoring the developing storm and prepared to implement hurricane plans.

Motiva’s Port Arthur, Texas, refinery was one of four refineries in east Texas inundated by more than 5 feet (1.52 m) of rain in a single day during 2017’s Hurricane Harvey.

Chevron, Phillips 66, Exxon and Royal Dutch Shell were preparing for heavy rain and wind at refineries along the Gulf Coast, company representatives said. Exxon reported operations at its Gulf Coast refineries were normal on Wednesday morning.

Chevron has shut production at five Gulf platforms – Big Foot, Blind Faith, Genesis, Petronius and Tahiti – and has begun to evacuate all workers at those offshore facilities, spokeswoman Veronica Flores-Paniagua said.

BP Plc, the second-largest oil producer in the Gulf by volume, is shutting all production at its four Gulf platforms – Thunder Horse, Atlantis, Mad Dog and Na Kika – which produce more than 300,000 barrels of oil equivalent per day.

BHP Group Ltd was also removing staff from its two offshore energy platforms, according to a company statement.

Two independent offshore producers, Fieldwood Energy LLC and LLOG Exploration Company LLC, declined to comment.

(Reporting by Collin Eaton and Erwin Seba in Houston; Editing by Gary McWilliams, Matthew Lewis and Leslie Adler)

Staff evacuated as rocket strikes near foreign oil firms in Iraq

Iraqi soldiers sit on a tank at the entry of Zubair oilfield after a rocket struck the site of residential and operations headquarters of several oil companies at Burjesia area, in Basra, Iraq June 19, 2019. REUTERS/Essam Al-Sudani

By Aref Mohammed and Ahmed Rasheed

BASRA, Iraq (Reuters) – A rocket hit a site in southern Iraq used by foreign oil companies on Wednesday, including U.S. energy giant ExxonMobil, wounding three people and threatening to further escalate U.S.-Iran tensions in the region.

There was no immediate claim of responsibility for the attack near Iraq’s southern city of Basra, the fourth time in a week that rockets have struck near U.S. installations.

Three previous attacks on or near military bases housing U.S. forces near Baghdad and Mosul caused no casualties or major damage. None of those incidents were claimed.

An Iraqi security source said it appeared that Iran-backed groups in southern Iraq were behind the Basra incident.

“According to our sources, the team (that launched the rocket) is made up of more than one group and were well trained in missile launching,” the security source said.

He said they had received a tip-off several days ago the U.S. consulate in Basra might be targeted but were taken by surprise when the rocket hit the oil site.

Iranian officials have made no comment about the attack but have strongly denied all other allegations against them of attacking energy tankers and facilities in the region.

Abbas Maher, mayor of the nearby town of Zubair, said he believed Iran-backed groups had specifically targeted Exxon to “send a message” to the United States.

U.S.-Iranian hostility has risen since President Donald Trump withdrew Washington from a 2015 nuclear deal with Iran and other world powers in May last year.

Trump has since reimposed and extended U.S. sanctions on Iran, forcing states to boycott Iranian oil or face sanctions of their own. Tehran has threatened to abandon the nuclear pact unless other signatories act to rein in the United States.

The U.S. face-off with Iran reached a new pitch following attacks on oil tankers in the Gulf in May and June that Washington blames on Tehran. Iran denies any involvement.

ESCALATION FEARED

While the long-time foes say they do not want war, the United States has reinforced its military presence in the region and analysts say violence could nonetheless escalate.

Some Western officials have said the recent attacks appear designed to show Iran could sow chaos if it wanted.

Iraqi officials fear their country, where powerful Iran-backed Shi’ite Muslim militias operate in close proximity to some 5,200 U.S. troops, could become an arena for escalation.

The United States has pressed Iraq’s government to rein in Iran-backed paramilitary groups, a tall order for a cabinet that suffers from its own political divisions.

Iraq’s military said three people were wounded in Wednesday’s strike by a short-range Katyusha missile. It struck the Burjesia site, west of Basra, which is near the Zubair oilfield operated Italy’s Eni SpA.

Police said the rocket landed 100 meters from the part of the site used as a residence and operations center by Exxon. Some 21 Exxon staff were evacuated by plane to Dubai, a security source said.

Zubair mayor Maher said the rocket was fired from farmland around 3-4 km (2 miles) from the site. A second rocket landed to the northwest of Burjesia, near a site of oil services company Oilserv, but did not explode, he said.

“We cannot separate this from regional developments, meaning the U.S.-Iranian conflict,” Maher said.

“These incidents have political objectives … it seems some sides did not like the return of Exxon staff.”

EXPORTS UNAFFECTED

Exxon had evacuated its staff from Basra after a partial U.S. Baghdad embassy evacuation in May and staff had just begun to return.

Burjesia is also used as a headquarters by Royal Dutch Shell PLC and Eni., according to Iraqi oil officials.

The officials said operations including exports from southern Iraq were not affected.

A separate Iraqi oil official, who oversees foreign operations in the south, said the other foreign firms had no plans to evacuate and would operate as normal.

A Shell spokesman said its employees had “not been subject to the attack … and we continue normal operations in Iraq.”

Eni say its operations were also proceeding as normal after the rocket exploded “several kilometers” from its facilities.

Wednesday’s rocket strike fits into a pattern of attacks since May, when four tankers in the Gulf and two Saudi oil pumping stations were attacked.

They have been accompanied by a spate of incidents inside Shi’ite-dominated Iraq, which is allied both to the United States and fellow Shi’ite Muslim Iran.

The attacks in Iraq have caused less damage but have all taken place near U.S. military, diplomatic or civilian installations, raising suspicions they were part of a campaign.

A rocket landed near the U.S. embassy in Baghdad last month causing no damage or casualties. The United States had already evacuated hundreds of diplomatic staff from the embassy, citing unspecified threats from Iran.

Iran backs a number of Iraqi Shi’ite militias which have grown more powerful after helping defeat Islamic State.

Iraqi officials say that threats from Iran cited by Washington when it sent additional forces to the Middle East last month included the positioning by Iran-backed militias of rockets near U.S. forces.

Rockets hit on or near three separate military bases housing U.S. forces near Baghdad and in the northern city of Mosul in three separate attacks since Friday.

(Additional reporting by Rania El Gamal in Dubai, Stephen Jewkes in; Writing by John Davison; Editing by Clarence Fernandez, Jon Boyle and Andrew Cawthorne and Alison Williams)

Major quake cuts communications, halts oil and gas operations in Papua New Guinea

A supplied image shows a landslide and damage to a road located near the township of Tabubil after an earthquake that struck Papua New Guinea's Southern Highlands, February 26, 2018. Jerome Kay/Handout via REUTERS

By Charlotte Greenfield and Sonali Paul

WELLINGTON/MELBOURNE (Reuters) – At least one company began evacuating non-essential personnel after a powerful 7.5 magnitude earthquake hit Papua New Guinea’s energy-rich interior on Monday, causing landslides, damaging buildings and closing oil and gas operations.

The tremor hit in the rugged, heavily forested Southern Highlands about 560 km (350 miles) northwest of the capital, Port Moresby, at around 3.45 a.m. local time (1545 GMT Sunday), according to the U.S. Geological Survey (USGS).

A spokesman at Papua New Guinea’s National Disaster Center said by telephone the affected area was very remote and the agency could not properly assess damage until communication was re-established.

He said there were no confirmed casualties, although the International Red Cross (IRC) in Papua New Guinea said some reports indicated there were “fears of human casualties”.

“It’s a very serious all across the Southern Highlands and also all over the western highlands. People are definitely very frightened,” Udaya Regmi, the head of the IRC in Papua New Guinea, said by telephone from Port Moresby.

A supplied image shows a landslide and damage to a road located near the township of Tabubil after an earthquake that struck Papua New Guinea's Southern Highlands, February 26, 2018. Jerome Kay/Handout via REUTERS

A supplied image shows a landslide and damage to a road located near the township of Tabubil after an earthquake that struck Papua New Guinea’s Southern Highlands, February 26, 2018. Jerome Kay/Handout via REUTERS

The PNG government also said it had sent disaster assessment teams. At least 13 aftershocks with a magnitude of 5.0 or more rattled the area throughout the day, according to USGS data, but no tsunami warnings were issued.

“The Papua New Guinea Defense Force has also been mobilized to assist with the assessment and the delivery of assistance to affected people as well as the restoration of services and infrastructure,” Isaac Lupari, the chief secretary to the government, said in a statement.

ExxonMobil said it had shut its Hides gas conditioning plant and that it believed administration buildings, living quarters and a mess hall had been damaged. It also said it had suspended flights into the nearby Komo airfield until the runway could be surveyed.

“Due to the damage to the Hides camp quarters and continuing aftershocks, ExxonMobil PNG is putting plans in place to evacuate non-essential staff,” the company said in an emailed statement.

Gas is processed at Hides and transported along a 700 km (435 miles) line that feeds a liquefied natural gas plant near Port Moresby for shipping.

PAPUA PANIC

PNG oil and gas explorer Oil Search said in a statement it had also shut production in the quake-affected area.

The giant Grasberg copper mine operated by the Indonesian unit of Freeport McMoRan in neighboring Papua province was not affected, a Jakarta-based spokesman said.

However, the quake and several aftershocks caused panic in Jayapura, the capital of Indonesian Papua, Indonesia’s disaster mitigation agency said in a statement, but there were no reports of casualties or damage there.

The IRC’s Regmi said communications were “completely down” in Tari, one of the larger settlements near the quake’s epicenter, and that landslides had cut roads.

Several other aid and missionary agencies said poor communications in the area made damage and injury assessment difficult.

“The bush structures that they build tend to handle earthquakes extremely well,” Christian missionary Brandon Buser told Reuters after contacting several remote villages by shortwave radio.

Earthquakes are common in Papua New Guinea, which sits on the Pacific’s “Ring of Fire”, a hotspot for seismic activity due to friction between tectonic plates.

“This is the Papuan fold-and-thrust belt, so it’s a typical movement of faults in that region, but it’s big,” said Chris McKee, acting director of the Geohazards Management Division in Port Moresby.

Part of PNG’s northern coast was devastated in 1998 by a tsunami, generated by a 7.0 quake, which killed about 2,200 people.

(For a graphic on ‘Papua New Guinea’s 7.5 magnitude earthquake’ click http://tmsnrt.rs/2ow1YLR)

(Reporting by Charlotte Greenfield in WELLINGTON and Sonali Paul in MELBOURNE; Additional reporting by Fergus Jensen in JAKARTA and Tom Westbrook in SYDNEY; Writing by Jonathan Barrett; Editing by Paul Tait)

Thousands flee Texas towns flooded by Harvey; gas prices spike

Lorenzo Salina helps a neighbor to clean a house damaged by Tropical Storm Harvey in East Houston, Texas, U.S. September 1, 2017.

By Emily Flitter and Peter Henderson

ORANGE, Texas/HOUSTON (Reuters) – Rescuers searched flooded sections of southeastern Texas for people trapped by Hurricane Harvey’s deluge on Friday, and Houston’s mayor warned residents of the city’s west that their neighborhoods may remain underwater for two weeks.

The storm, one of the costliest to hit the United States, has displaced more than 1 million people, with up to 44 feared dead from flooding that paralyzed Houston, swelled river levels to record highs and knocked out the drinking water supply in Beaumont, Texas, a city of about 120,000 people.

Houston Mayor Sylvester Turner called for voluntary evacuations of flooded homes, which he said may remain waterlogged as the Army Corps of Engineers continues to release water into the Buffalo Bayou to prevent dam and levee failures.

About 80 miles (130 km) east of the city, the Neches River, which flows into Beaumont and nearby Port Arthur, was forecast to crest on Friday.

Rescue officials were still working to determine the scope of flooding caused by releases from Orange County dams, said Rodney Smith, deputy chief of the Cedar Hill, Texas, Fire Department.

“A lot of what gives us a snapshot of what’s on the ground are 911 (emergency) calls,” Smith said, adding that about 80 rescue crews were rotating through the county. “If the water starts to recede, we’ll start doing searches door-to-door, block-to-block to see if anyone is still in their homes.”

Tiana Kelly, 22, was waiting in a shelter in Orange, Texas, after being rescued from her flooded street by National Guard troops in a special high-water truck at 2 a.m. Friday.

“I was checking on my neighbor’s dogs and I saw their flashlights, so I flashed my flashlight and they came and got us,” Kelly said as she sat with her 11-month old son, Kalameet, in her arms. “They told us there was an eight-foot flash (flood) that was supposed to come.”

Chemical maker Arkema SA said a fire started on Thursday in a truck storing chemicals at a flooded plant 25 miles (40 km) east of Houston had burned itself out by Friday, but that more blasts were likely in eight other trucks storing the same chemicals in the coming days. Police were enforcing 1.5-mile (2.4-km) exclusion zone around the Crosby, Texas facility.

With three months remaining in the official Atlantic hurricane season, a new storm, Irma, had strengthened into a Category 3 storm on the five-step Saffir-Simpson scale, on Friday. It remained hundreds of miles from land but was forecast to possibly hit the U.S. territory of Puerto Rico, the Dominican Republic and neighboring Haiti by the middle of next week.

Harvey shut about a quarter of U.S. refinery capacity, much of which is clustered along the Gulf Coast, and caused gasoline prices to spike to a two-year high ahead of the long Labor Day holiday weekend.

Harvey roared ashore a week ago as a Category 4 storm and the most powerful hurricane to hit Texas in half a century. It dumped unprecedented amounts of rain and left devastation across more than 300 miles (480 km) of the state’s coast.

 

OIL RELEASED FROM FEDERAL SUPPLY

The national average for a gallon of regular gasoline has risen 17 cents since the storm hit, hitting $2.519 as of Friday morning, the highest since August 2015, according to motorists group AAA.

Supply concerns prompted the U.S. Energy Department to authorize the release of up to 4.5 million barrels of oil from the Strategic Petroleum Reserve.

Several East Coast refineries have run out of gasoline, raising fears that travelers will face fuel shortages during the three-day holiday.

In major Texas cities including Dallas, there were long lines at gas stations.

The storm came on the 12th anniversary of Hurricane Katrina, which killed about 1,800 around New Orleans. Then-U.S. President George W. Bush’s administration was roundly criticized for its botched early response to the storm.

Signaling that he did not want to be seen as repeating those mistakes, President Donald Trump plans a second visit to the region on Saturday.

“The people of Texas and Louisiana were hit very hard by a historic flood and their response taught us all a lesson, a very, very powerful lesson,” Trump said after meeting with charity organizations in the Oval Office. “There was no outbreak in crime. There was an outbreak of compassion only … and it really inspired us as a nation.”

U.S. first lady Melania Trump, Vice President Mike Pence and U.S. President Donald Trump receive an update on Hurricane Harvey recovery efforts at the White House in Washington, U.S., September 1, 2017.

U.S. first lady Melania Trump, Vice President Mike Pence and U.S. President Donald Trump receive an update on Hurricane Harvey recovery efforts at the White House in Washington, U.S., September 1, 2017. REUTERS/Kevin Lamarque

Lawmakers will replenish a federal disaster relief fund to keep aid flowing, but full assistance will come from Congress in installments, U.S. House of Representatives Speaker Paul Ryan said.

“The cash drain is fast. And so we’re going to have to do some quick responses,” Ryan said in an interview with radio station WCLO in his hometown Janesville, Wisconsin.

Moody’s Analytics estimated the economic cost from Harvey for southeastern Texas at $51 billion to $75 billion.

 

 

 

(Additional reporting by Richard Valdmanis, Marianna Parraga, Ernest Scheyder, Ruthy Munoz, Peter Henderson and Andy Sullivan in Houston, David Gaffen in New York, Jon Herskovitz in Austin, Texas, and Brendan O’Brien in Milwaukee; Writing by Scott Malone Jon Herskovitz; Editing by Bill Trott and Jonathan Oatis)

 

Oil prices rise as Middle East producers confirm supply cuts

A motorist holds a fuel pump at a Gulf petrol station in London Apri

By Sabina Zawadzki

LONDON (Reuters) – Oil prices rose on Tuesday, supported by strong demand in Asia and supply cuts by Abu Dhabi, Kuwait and Qatar as part of production curbs organized by OPEC and other exporters.

But traders said the market was pressured by investors closing financial positions that profited from strong gains the day before.

International Brent crude and U.S. West Texas Intermediate  flirted with negative territory in early European trading. By 1420 GMT, Brent was up 40 cents at $56.09 a barrel, while WTI was up 34 cents $53.17.

Traders said there was significant profit-taking after oil shot to mid-2015 highs earlier this week following a deal reached by the Organization of the Petroleum Exporting Countries and other exporters led by Russia to cut output by almost 1.8 million barrels per day (bpd).

But they added that oil markets were still broadly supported by the arrangement to crimp output.

“The market is putting a lot of importance on the commentaries coming out of OPEC and non-OPEC (and) the market is giving OPEC the benefit of the doubt that cuts will be implemented and achieved,” said Michael McCarthy, chief market strategist at Sydney’s CMC Markets.

However, analysts warned prices would turn fast if the market believed compliance was lacking.

“The plan was designed on Nov. 30. The foundation was laid down on Dec. 10. The construction will start on Jan. 1. The following three to six months will provide us with an answer as to whether the foundation is strong enough to hold the building or will it collapse like a house of cards,” PVM analysts wrote.

In a sign that producers are acting on their plans to cut output, Abu Dhabi National Oil Co told customers it would reduce Murban and Upper Zakum crude supplies by 5 percent and Das crude exports by 3 percent.

Kuwait Petroleum Corp notified customers of a cut in contractual crude supplies for January, as did Qatar Petroleum.

Meanwhile, China’s November crude output fell 9 percent from a year earlier to 3.915 million bpd, data showed on Tuesday. Production recovered from October’s 3.78 million bpd, however, which was the lowest in more than seven years.

China’s refinery throughput hit a record in November of 11.14 million bpd, up 3.4 percent year-on-year.

“Declines in Chinese … crude oil output and expansion of its strategic crude reserves underpin our view for China’s crude oil imports to strengthen,” BMI Research said.

In India, fuel demand rose 12.1 percent year-on-year in November.

(Additional reporting by Henning Gloystein and Keith Wallis in Singapore; Editing by Dale Hudson and Louise Heavens)

Delta militants threaten ‘something big’, greet Nigerian children

A painting depicting Isaac Adaka Boro, a former Niger Delta militant in the 1960s, is seen along a road in the village of Kiama near Yenagoa

LAGOS (Reuters) – The Niger Delta Avengers militant group, which has mounted a bombing campaign against oil pipelines, on Friday threatened “something big” – but also wished Nigerian youngsters a Happy Children’s Day.

The Avengers say oil firms in the Delta are responsible for pollution and say the poor swampland region fails to reap any benefit from the wealth on which it sits.

The militants, whose activities have hammered Nigeria’s crude output, posted a warning on Twitter to the army and oil firms: “Watch out something big is about to happen and it will shock the whole world “.

They also sent out salutations to children. The Avengers

website showed a picture of children clambering over rusting oil pipelines above a message condemning the Nigerian government for denying the nation’s youth the “enchanting vista” of childhood.

Children’s Day is celebrated on May 27 in Nigeria, with primary and secondary schools closed.

(Reporting by Ed Cropley; Editing by Angus MacSwan)

Repair Crews assess Canada Wildfire Damage

Crews begin to work on the burned out remains of the Waterways neighbourhood of Fort McMurray

By Rod Nickel

FORT MCMURRAY, Alberta (Reuters) – Repair crews were expected to assess wildfire damage to the Canadian energy boomtown of Fort McMurray on Tuesday as the oil sands companies surrounding the ravaged city looked at bringing production back on line.

Political leaders got their first glimpse of the city on Monday since wildfire forced 88,000 residents to flee for safety. Alberta Premier Rachel Notley said they were encouraged by how much of it escaped destruction, estimating almost 90 percent of its buildings were saved.

But the tour also revealed scenes of utter devastation, with blocks of homes reduced to blackened foundations, front steps and metal barbecues.

Notley said 2,400 structures had burned within the city while almost 25,000 were saved.

The fire, expected to grow further on Tuesday, ravaged some 204,000 hectares (504,000 acres) of Alberta. But it also moved far enough away from the evacuated town to allow an official delegation to visit on Monday.

Officials warned it was not safe for residents to return, with parts still smoldering and large areas without power, water and gas. Notley said repair crews will have weeks of work ahead of them to make the city safe.

The assessment by officials came a few hours after insurance experts revised sharply downward their estimates of the cost of damage from the blaze, which began on May 1.

Cooler weather, which has helped firefighters battling the blaze, was expected to linger through Thursday, according to Environment Canada. Still, much of Alberta is tinder-box dry after a mild winter and warm spring.

Fort McMurray is the center of Canada’s oil sands region. About half of its crude output, or 1 million barrels per day, has been taken offline, according to a Reuters estimate.

Oil sands companies, which have high fixed costs, are expected to work as quickly as possible to get production back online, but face the challenge of many staff and suppliers being displaced by the evacuation.

In one encouraging sign for industry, Royal Dutch Shell Plc said on Monday it restarted production at a reduced rate at its Albian oil sands mining operation in Alberta, adding it plans to fly staff in and out.

But Imperial Oil said late on Monday it completed a controlled shutdown of its Kearl oil sands mining project, blaming the uncertainties associated with logistics.

(Writing Jeffrey Hodgson in Toronto; Editing by Ryan Woo)