The oil and gas industry on the US Gulf Coast is beginning to take stock of the damage done by Hurricane Ida Sunday, but oil prices are remaining steady in the meantime.
Ida, a violent Category 4 hurricane with sustained winds of 150 miles per hour, came ashore directly at Port Fourchon, Louisiana.
Port Fourchon is a major supply and logistics hub for offshore oil and gas production, and a departure point for many employees working on offshore rigs. It is also home to the Louisiana Offshore Oil Port, the largest privately owned port in the US.
According to the Port Fourchon website, the LOOP handles about 10% to 15% of the country's domestic oil, as well as 10% to 15% of the nation's imports of foreign oil.
The status of the facility was not immediately known, as the LOOP’s dedicated page for updates related to the hurricane was knocked offline.
“The actual terminal is approximately 20 miles offshore, likely escaped damage and has its own power supply. The onshore portion including the Clovelly Hub pump and storage facilities could be more at risk,” Wells Fargo said in a note released Monday morning.
“Self-generated power, local power supply and even roads likely sustained significant damage from Hurricane Ida. Prior storms have come near, but none have directly struck the port or hub areas. We believe this should be watched closely for implications of returning US crude oil production, imports and exports to normal.”
Port Fourchon was far from the only region of importance to the industry struck by Ida, but damage reports were slow to emerge.
Wells Fargo analyst Roger Read said the slow movement of Ida, now a tropical storm, meant damage assessments may not begin until Tuesday.
The US Bureau of Safety and Environmental Enforcement said Monday afternoon that approximately 95% of oil production in the Gulf remains shut in, with 94% of natural gas production. That is almost identical to the amount of oil and gas shut in Sunday. BSEE said all offshore rigs will be inspected before they can be placed back on production.
“Offshore oil production recovery from hurricanes tend to be measured in days, while refinery restarts can be measured in weeks or even months,” Cowen said in note released Monday. That could be a bad sign, as approximately 1.9 million bpd of refining capacity was estimated to be offline in Louisiana alone.
Damage reports from refineries and offshore facilities had not been made public as of Monday morning US time.
The US Coast Guard reported visual confirmation that the Shell-operated Mars, Olympus, and Ursa platforms remain on location, following a flyover conducted Sunday afternoon for a general assessment. The company is scheduled to perform its own flyover Monday afternoon to assess all of its assets that were in the path of the storm, it stated on its website.
The Colonial pipeline, which carries gasoline from Texas to the Gulf Coast and made headlines earlier this summer when it was shut down in response to a cyberattack, was taken offline again over the weekend in what the company called a “precautionary and routine safety measure.”
Colonial said the pipeline will return to full service once Ida leaves the region.
As the industry awaited damage reports from Louisiana and elsewhere, oil prices stayed flat. West Texas Intermediate crude was selling for $69, an increase of 26 cents per barrel, in early afternoon trading on the east coast of the US.