Hurricane Forecast Prompts Gulf Offshore Operators to Shut in Production

Forecasts show Tropical Storm Rafael strengthening into a hurricane and taking a course across the Gulf of Mexico, and offshore producers are shutting in platforms and evacuating rigs in advance of high winds and waves. 

As of Tuesday night, Rafael was located south of the Cayman Islands, heading northward with wind speeds of about 60 knots. The National Hurricane Center expects it to strengthen into a Category 1 hurricane overnight, bringing dangerous storm surge, high winds and heavy rain to the Caymans, Jamaica and western Cuba. 

After passing over Cuba, Rafael should turn to the northwest, towards the central Gulf of Mexico and the Louisiana coastline - but it is too early to tell what impacts the storm might have on U.S. shores, according to the NHC. Beyond Friday, different models produce different predictions about Rafael's direction, and the impact on U.S. Gulf Coast interests is too early to forecast, NHC said. The storm is expected to weaken to 40 knots - well below hurricane strength - before making landfall. 

As a precautionary measure, oil and gas interests in the central Gulf are beginning the process of shutting in production. The list of shutdowns and partial shutdowns so far includes Equinor's Titan platform; Chevron's platforms, including Anchor, Blind Faith, Jack/St. Malo, Tahiti, Petronius and Big Foot; and more than half a dozen well-known facilities operated by BP and Shell. Occidental Petroleum has not shuttered its facilities, it told Reuters, and is monitoring the weather forecast before making further decisions. 

When producers evacuate rigs in advance of a storm, they shut in production at the wellhead for safety and environmental protection purposes. The lost production during this storm could approach 1.7 million barrels per day, according to Bloomberg; other estimates range as high as 4.9 million bpd. Brent crude futures rose 0.6 percent on news of the shut-ins. 

Rafael is the 17th named storm of the Atlantic hurricane season, and is a late hurricane. In August, NOAA predicted 17-24 named storms this year, including 8-13 hurricanes.