MOSCOW (MRC) -- Shell and other top producers in the US Gulf of Mexico are planning to resume drilling operations and bring production volumes back online now that Tropical Depression Cristobal is onshore and most deepwater oil and gas facilities were left unscathed, said S&P Global.
While Shell never took any oil and gas volumes offline during the storm, BP, Occidental Petroleum and others shut in some production volumes as the Gulf temporarily lost nearly 35% of its crude volumes and almost one-third of its natural gas output, according to the US Bureau of Safety and Environmental Enforcement.
More than 635,000 b/d of crude and 878 MMcf/d of gas were shut in ahead of Cristobal's move onshore, BSEE said June 7, as operators evacuated 188 platforms and rigs in the Gulf -- roughly 30% of the US Gulf's total platforms with working personnel.
BP, for instance, had reduced outputs at its Thunder Horse, Atlantis and Na Kika platforms in the Gulf. Those three BP-operated platforms churn out more than 200,000 boe/d.
Shell said June 8 that it will begin redeploying nonessential workers who were evacuated from offshore platforms as Shell resumes operations. "There were no impacts to our production as a result of TS Cristobal, and we expect to resume our drilling operations as conditions continue to improve today and tomorrow," Shell said in a prepared statement.
A Murphy Oil spokesman said the oil producer was working to return crews to their offshore locations. And ExxonMobil said its offshore facilities and USGC refineries are all operating normally.
Cristobal battered southern Mexico and shut down ports over the past week, before moving through the Gulf and spreading heavy rainfall from Louisiana to Florida. The storm hit just as oil prices were moving up with the OPEC+ group agreeing to extend deeper production cuts at least through July and front-month NYMEX WTI flirting with hitting $40/b for the first time since early March.
Total Gulf oil production was nearly 2 million b/d before the coronavirus pandemic cratered global demand and oil prices. BSEE was estimating Gulf oil production at closer to 1.85 million b/d before Cristobal.
However, S&P Global Platts Analytics data estimates that Gulf crude oil production will fall to an estimated 1.62 million b/d average for June as some producers reduced their volumes because of lower prices.
As MRC wrote previously, Tropical Storm Cristobal forced ports to close in three states in Mexico's Bay of Campeche area June 3, although there has been no major impact on oil, gas or power generation infrastructure.
We remind that Royal Dutch Shell Plc restarted the crude distillation unit, coker and gasoline-producing cat cracker at its 225,300 barrel-per-day (bpd) Norco, Louisiana, refinery. Shell is restarting the hydrocracker, while the reformer and naphtha hydrotreater will remain shut for previously planned work, the sources said. The coker is scheduled to undergo planned work beginning next week, but is expected to remain in operation.
We also remind that Shell Singapore restarted its naphtha cracker in Bukom Island in early December 2019, following a two months maintenance shutdown since the beginning of October 2019. Thus, this cracker was taken off-stream for the turnaround on 1 October 2019. The cracker is able to produce 960,000 tons/year of ethylene and 550,000 tons/year of propylene.
Ethylene and propylene are feedstocks for producing polyethylene (PE) and polypropylene (PP).
According to MRC"s ScanPlast report, Russia's estimated PE consumption totalled 721,290 tonnes in the first four month of 2020, up by 4% year on year. Low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) shipments grew partially because of the increased capacity utilisation at ZapSibNeftekhim. At the same time, PP shipments to the Russian market totalled 347,440 tonnes in January-April 2020 (calculated by the formula production minus export plus import). Supply exclusively of PP random copolymer increased.
MRC