Quiet early hurricane season helps restore US oil

Quiet early hurricane season helps restore US oil

A quieter-than-expected start to hurricane season has let oil and gas companies restore more production and strengthen more platforms before the next big storm hits the Gulf of Mexico, a U.S. government official said on Friday.

"A lot of people have stayed out there and worked instead of being onshore," said Charles J. "Chuck" Schoennagel, deputy regional director for the U.S. Minerals Management Service.

The MMS has not updated production statistics in the Gulf since mid-June, when the agency counted 12 percent of daily oil production and 9.4 percent of daily natural gas production shut in because of storm damage.

"I think it's fair to say it's gone up," Schoennagel said.,

He could not say how much production has increased pending a new agency survey.

Daily production before the storms was 1.5 million barrels of oil and 10 billion cubic feet of gas, a quarter of U.S. production.

Hurricanes Ivan in 2004 and Dennis, Katrina and Rita in 2005, caused some of the worst storm damage ever in the Gulf petroleum province.

Storm experts have predicted another severe year in 2006, but so far only one tropical storm, Alberto, has entered the Gulf and it avoided producing areas.

Shell (RDSa.L: Quote, Profile, Research) and BP (BP.L: Quote, Profile, Research), two of the biggest producers in the Gulf, report being virtually back to levels enjoyed before Hurricane Katrina raked the Gulf last August.

They benefited from early restoration of the Mars platform prior to the start of hurricane season, officials said.

Chevron <CVX.N,>, which lost its Typhoon facility, says it's still about 20 percent down.

The respite from stormy weather has also enabled companies to complete more measures to strengthen facilities and, it is hoped, minimize damage in future hurricanes, Schoennagel said.

Among changes are added mooring lines on drilling rigs, higher minimum operating heights for jackups, stronger clampdowns for drill towers on platforms and avoiding drilling in soft-bottom areas during hurricane season.

Some Gulf production will be permanently lost, although the exact amount has not been determined, Schoennagel said.

"Several operators have already submitted permits to put new facilities out there to replace ones that were destroyed," he said. "Then we have some still probably looking at the economics to make that decision."