Isaac cost energy industry up to $1 billion, firm says

Isaac cost the energy industry up to $1 billion from lost production and damage to offshore platforms and pipelines, according to an estimate from Eqecat, a catastrophe risk modeling firm.

The storm, which struck as a Category 1 hurricane, forced oil companies to evacuate offshore platforms and shut down nearly all production in the Gulf of Mexico.

The storm’s remnants moved into Arkansas on Friday, dumping heavy rain after causing flooding and power outages in Louisiana. The storm cut power to a Phillips 66 refinery in Belle Chasse, La., which also sustained some flooding.

Oil companies were assessing damage and readying to restart operations where they had been halted by Isaac.

Eqecat estimated the damages or losses suffered by energy companies because of Isaac could range from $500 million to $1 billion.

The estimate includes projections for damage to fixed, floating and underwater assets in the Gulf.

Another form, AIR Worldwide said estimated that the total amount of insured losses from Isaac would total $2 billion, including “wind and storm surge damage to onshore residential, commercial and industrial properties and their contents, automobiles, and time element coverage.”

“AIR does not expect significant physical damage to offshore oil rigs and gas platforms either from wind or waves,” the company added.

Companies said they were evaluating any impacts on facilities.

“With conditions improving, BP today will begin redeploying offshore personnel to BP-operated production platforms and drilling rigs in the Gulf of Mexico,” BP said in a statement. “While aerial surveys of our offshore facilities did not identify any significant damage, crews will perform closer inspections onsite. Once deemed safe, facilities will be restarted and oil and natural gas production will recommence in coming days.”

BP said its onshore facilities that were cleared and where operations stopped could restart today.

Ten Gulf Coast refineries with combined crude oil processing capacity of about 2.4 million barrels a day were taken offline or running at reduced rates because of the storm, according to the Oil Price Information Service.

The United States has about 17.3 million barrels of refining capacity on any given day, according to the U.S. Energy Information Administration.

“We are beginning the process of restoring operations at those facilities that can be safely restarted,” said Exxon Mobil, which had reduced operations at its Baton Rouge refinery, one of the largest in the nation.

Chevron said it was assessing any damage to its offshore operations, but would not reveal many details.
“We will not comment on any possible impact to operations,” the company said in a statement on its website.
Offshore production came to a near-standstill because of Isaac, with 95 percent of Gulf oil production – more than 1.3 barrels a day – shut in as a result of the storm.
Gulf operators evacuated workers from 509 platforms, 84 percent of the total in the region, according to the U.S. Bureau of Safety and Environmental Enforcement.