2nd UPDATE:Alex Likely To Have Limited Impact On US Gulf Oil, Gas Output

28th Jun 2010 18:52

(Updates to add effects of storm on BP's Gulf of Mexico operations and oil spill recovery efforts) By Isabel Ordonez Of DOW JONES NEWSWIRES HOUSTON (Dow Jones)--Oil and gas producers in the Gulf of Mexico continued evacuating workers from the area due to Tropical Storm Alex, which is expected to become a hurricane Tuesday but so far poses no threat to the U.S. energy industry. Alex "is not likely to have a major impact on production or refining in the U.S.," Doug MacIntyre, senior analyst at the Energy Information Administration, told Dow Jones Newswires Monday. "Alex's current path appears to avoid most of the oil and gas production platforms and any of the major refining centers." At 11 a.m. EDT, Alex was located about 85 miles west-northwest of Campeche, Mexico, in the western Gulf of Mexico and was heading towards southern Texas and northern Mexico. The bulk of the U.S. offshore oil and gas platforms are located in the eastern part of the Gulf, far from Alex's forecast path. Energy markets Monday seemed to take the storm in stride. Light, sweet crude for August delivery fell 75 cents, or 0.9%, to $78.11 a barrel on the New York Mercantile Exchange. Natural gas for July delivery on the New York Mercantile Exchange was trading 11 cents lower, or 2.22%, at $4.75 a million British thermal units after opening 5.1 cents lower at $4.81/MMBtu. Companies, however, started taking precautionary measures over the weekend. Royal Dutch Shell PLC (RDSA, RDSB, RDSA.LN, RDSB.LN), one of the largest producers in the area, said subsea production that flows to its Auger and Brutus platforms remains shut down. The company, which closed down the platforms' production and started removing workers during the weekend, said it continued evacuating personnel from its Southwestern Deepwater Gulf operations. On Sunday, the total number of personnel Shell removed was about 430, with 1,100 remaining offshore, the company said in its website. BP PLC (BP, BP.LN) said Monday it pulled non-essential personnel from three offshore facilities in the the Gulf, and that production was not affected. The company evacuated workers from Atlantis, Mad Dog and Hostein platforms. But Alex may delay BP PLC's plans to increase the amount of oil collected from a leaking well in the Gulf by a week, a company official said Monday. While the storm's winds are expected to stay far to the west of the Deepwater Horizon spill, high seas are likely to become an issue this week, said Kent Wells, a senior vice president with BP, in a press briefing. Waves up to between 10 feet and 12 feet would prevent BP from hooking a third rig up to an underwater containment system, a process that needs three days of good weather, Wells said. Two rigs, the Discoverer Enterprise and Q4000, are already collecting between 20,000 and 25,000 barrels of oil a day from the well, which has gushed ever since a rig working at the site caught fire and sank in April. Apache Corp. (APA), Exxon Mobil Corp. (XOM), and Anadarko Petroleum Corp. (APC) also said Monday they have started evacuating non-essential workers from the offshore facilities expected to be in the path of the storm but have so far not reported any impact to their production. Chevron Corp. (CVX) and ConocoPhillips (COP) said that they have not evacuated workers, but that they are closely monitoring the forecast for Alex. A hurricane watch was issued for parts of the south Texas Gulf coastline area and parts of northern Mexico, the National Hurricane Center reported Monday on its website. The NHC, in its advisory, also said Alex likely will become a hurricane Tuesday and has increased in strength, now with winds of 60 miles per hour. The watch area for the U.S. extends from south of Baffin Bay to the mouth of the Rio Grande in Texas, with Mexico issuing a hurricane watch from the Rio Grande to La Cruz. -By Isabel Ordonez, Dow Jones Newswires; 713-547-9207; [email protected] (Brian Baskin and Angel Gonzalez contributed to this article) (END) Dow Jones Newswires June 28, 2010 13:52 ET (17:52 GMT)