Monday, May 31, 2010

Oil spill trims U.S. offshore natural gas supply as MMS Closes Two Energy Production Platforms in Gulf

By Kristen HaysPosted 2010/05/01 at 4:10 pm EDT

HOUSTON, May 1, 2010 (Reuters) — The government on Saturday said two offshore production platforms in the Gulf of Mexico were shut as a safety precaution -- the first sign that the giant oil slick was affecting the region's energy production.

The Minerals Management Service -- the arm of the Interior Department that oversees offshore oil and gas activity -- said the two platforms were shut down as a safety precaution due to the oilspill.

They account for less than 0.1 percent of daily Gulf of Mexico output. Some 6.2 million cubic feet per day of natural gas production are involved, the service said.

The MMS did not identify the names or companies that own the affected platforms, and said more platform shutdowns may be ordered as the spill spreads eastward.

"Yes, there's always the possibility of that," MMS spokeswoman Eileen Angelico said, when asked if more shutdowns were possible.

Analysts downplayed the impact of the spill on offshore energy production. The spill's trajectory is closer to land and away from more prolific deepwater production platforms, experts said.

"It shouldn't affect production too dramatically," said Dan Pickering, co-president of Tudor Pickering Holt & Co. "It doesn't feel like there's imminent danger around the production itself."


The bigger issue is whether the spill would prompt a moratorium on drilling, Pickering said.

"The implications here are the ongoing impact to the industry overall and how this becomes a significant influence on how people think of offshore activity," he said.

Spokesmen for big offshore producers Apache Corp and Anadarko Petroleum Corp said their operations have were unaffected by the spill.

The Anadarko-operated Independence Hub, the largest natural gas processing facility in the Gulf with capacity to produce 1 billion cubic feet per day of gas, is well southeast of the spill and out of its path, spokesman John Christiansen said.

The rig Deepwater Horizon, owned by Transocean Ltd, sank on April 22, two days after it exploded and caught fire while finishing a well for BP Plc 42 miles off the Louisiana coast.

The companies and the U.S. government are in the process of trying to seal the leaking oil well.

On Monday, an offshore drilling rig owned by Diamond Offshore Drilling Inc that had been working near a sunken rig was evacuated as a precaution, an MMS official said.

The last event to affect offshore production was hurricanes Ike and Gustav in 2008, which shut down nearly all the region's output for weeks.

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