Isaac shutting down production, refineries likely next

Energy companies intensified their efforts to evacuate workers from the Gulf of Mexico, as companies continued shutting down production. The trend is likely to continue Monday with refinery operations also being suspended.

BP said Sunday it had suspended production at all of its operated production platforms in the Gulf of Mexico, as it and other energy companies scramble to get ready for Tropical Storm Isaac to blast into the Gulf.

The storm was moving across the Florida Keys and toward the Gulf Sunday afternoon, and several of the leading storm-tracking models show a westward shift, with a growing consensus that it will strengthen into a hurricane over the next few days.

The Bureau of Safety and Environmental Enforcement reported 24.19 percent of the current daily oil production in the Gulf had been shut-in by 11:30 a.m. Sunday, along with 8.24 percent of the current daily natural gas production.

Not all companies shut down production yet, although most were evacuating non-essential workers as they keep a wary eye on the storm.

Drilling in federal waters of the Gulf of Mexico accounts for 23 percent of domestic crude oil production, as well as about 7 percent of natural gas production.

About 40 percent of the country’s refining capacity is located along the Gulf coast, too. As of Sunday evening, there was no official word of refinery shut downs.

That appeared likely to change. Reuters reported Sunday night that Louisiana Gov. Bobby Jindal said one refinery in his state and and other in Mississippi were making plans to shut down.

In trading Monday morning, oil and gasoline are likely to rise as traders work to assess the length of disruptions and try forecast chances for long-term damage. Also injecting uncertainity in the market: The massive refinery explosion in Venezuela.

BP began evacuating workers as early as Friday; by Saturday, Chevron, Murphy Oil, Shell , ExxonMobil and other companies said they were evacuating non-essential workers.

Houston’s Apache Corp. said early Sunday that it had ordered additional evacuations and some production shut-ins at its operations in the eastern Gulf. In all, the company said it expected to evacuate 750 employees and contractors and shut down production representing about 24,000 barrels of oil per day by the end of the day.

And Anardarkosaid it was in the process of shutting in production and evacuating workers from its facilities in the eastern and central Gulf, including Independence Hug, Constitution, Marco Polo, Red Hawk, Neptune and Gunnison platforms.

Chevron said via Twitter Sunday morning that production had not been affected. Other companies said they will post further updates by Sunday night, as Isaac continues to churn into the gulf.

ExxonMobil spokesman Patrick McGinn said by email that all non-essential workers had been evacuated by Sunday afternoon.

Predictions called for Isaac to become a category 1 or category 2 hurricane, and Satish Nagarajaiah, a professor of civil and environmental engineering at Rice University, said the evacuations and production shut-downs were routine.

More platforms will be shut down by Monday, he said, most of them in the eastern gulf. And once the storm passes, production will be re-started quickly unless the platform sustained damage from the storm, he said. “I don’t think there will be a big effect,” Nagarajaiah said.