MMS updates Hurricane Ike damage assessments

Offshore staff

NEW ORLEANS -- Offshore operators continue to report damage from Hurricane Ike to the Minerals Management Service (MMS) Gulf of Mexico Regional Office.

MMS estimates that from Sept. 13-14, approximately 1,450 oil and gas production platforms in the Gulf of Mexico were exposed to hurricane conditions, winds greater than 74 mph. As of August 2008, there were more than 3,800 production platforms in the Gulf of Mexico.

As of Sept. 29, 2008, 52 of the 3,800 offshore oil and gas production platforms have been confirmed as destroyed. Initial estimates are that the 52 destroyed production platforms produced a total of 13,300 b/d of oil and 90 MMcf/d of gas. Currently, MMS has no information on whether any of the destroyed platforms will be rebuilt by any operator.

MMS has released additional details on the four drilling rigs that had been confirmed as destroyed by Hurricane Ike.

Destroyed Drilling Rigs as of 9/29/08
Ensco 74 - South Marsh Island 149
Pride Wyoming - Ship Shoal 283
Mad Dog Spar Rig - Green Canyon 782
Rowan Anchorage - Vermilion 201

As of Sept. 29, 2008, MMS has received reports of 32 platforms with extensive damage which may take from three to six months to repair. Examples of damage that would be considered extensive could include underwater structural damage or major damage to pipelines carrying the oil or natural gas to shore.

Additional reports show that 41 platforms received moderate damage taking one to three months before production can be restored. Damage that would be considered moderate may include major topside damage to critical process equipment such as the platform's compressor or damaged risers or flex joints where pipelines connect to the platforms.

In respect to drilling rigs damaged, MMS has confirmed a report of one jackup drilling rig with extensive damage.

To date, MMS has received reports of eight gas transmission pipeline systems with damage. Analysis of the impact that this damage may have on resuming production is underway. Operators have begun to test and inspect other pipeline systems to evaluate the full extent of any damage. Considering the large impacted area, it will take some time to complete the inspections, according to MMS.

Visual inspections of sheens/spills are being conducted as reports are received. MMS will compile and release sheen reports upon completion of the reporting and confirmation process. As previously reported, there was one report of a release totaling 200 bbl of oil during the hurricane event. Upon investigation, no sheen was observed. It is expected that the oil dissipated through the course of the hurricane. There have been no reports of oil impacting the shoreline or affecting birds and wildlife from releases in the Gulf of Mexico federal waters.

Production from the Gulf of Mexico accounts for 25% of the oil produced domestically and 15% of the natural gas produced domestically. As of June 2008, daily production estimates for the Gulf of Mexico were 1.3 MMbbl of oil and 7.0 bcf of gas. Since that time, gas production from the Independence Hub facility increased and in August 2008 gas production from the Gulf was estimated at 7.4 bcf of gas per day.

10/01/2008

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