Oil and gas companies operating in the Gulf of Mexico are beginning to return evacuated staff to offshore platforms after Hurricane Delta, Reuters reported, citing updates from Chevron, Shell, and BHP.

Close to 31 percent of production platforms in the Gulf were evacuated last week ahead of Delta, according to the Bureau of Safety and Environmental Enforcement. More than 91 percent of oil production was still offline as of Monday. This translates into a total loss of production of 8.8 million bpd.

Oil and gas processing infrastructure was also shut down but Chevron said today, as quoted by Reuters, that its Empire and Fourchon terminals and related pipeline networks in Louisiana were back online.

This makes Delta more damaging to oilfield operators than Laura. At its peak, Laura forced the evacuation of nearly half of the 643 offshore production platforms operating in the Federal Offshore Gulf of Mexico. The peak shut-in of crude oil production occurred on August 25, two days before Laura’s landfall, when 84 percent of the region’s average daily crude oil production in 2019 was shut in.

The production shut-ins prompted by Hurricane Delta will add to a bill of some $9 billion in costs associated with platform shut-ins and evacuations. Still, even with the tally after Delta, the bill may be lower than what offshore operators incurred in losses in 2017: $75 billion.

Despite the production shut-ins, oil prices remained subdued, as Libya began restarting production at its largest field, the 200,000-bpd Sharara and as Norwegian trade unions reached a deal with employers and ended a strike that had affected output in Europe’s largest oil producers. Libya’s output is seen rising to 355,000 bpd after the restart of Sharara.

The outlook for demand also remains grim as Europe tightens movement restrictions in response to rises in new Covid-19 infection numbers and many U.S. states also continue to report increases.

As a result of the restart of oil production in the Gulf of Mexico, crude prices fell on Monday morning, with WTI dropping below $40 per barrel. 

By Charles Kennedy for Oilprice.com

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