Weather Watch: Tropical Depression Stalls Over GOM

- Weather Watch: Tropical Depression Stalls Over GOM

Friday, September 02, 2011
Rigzone Staff
by Karen Boman

Shell reported Friday that Tropical Depression #13, which has winds near 35 mph and is stalled over the Gulf of Mexico, is impairing its efforts to evacuate staff from its deepwater operations.

The company has evacuated 550 workers and is using all available resources to safely evacuate employees. The number of personnel evacuated Friday will depend on weather conditions, "and we will only transport personnel if safe to do so", the company said.

Shell has shut in the Auger, Enchilada, Brutus and the Europa subsea field. Shell's non-operated downstream infrastructure partners have proceeded in evacuating their facilities and their actions have resulted in some production shut-ins as well.

The National Hurricane Center (NHC) reports that Tropical Depression No. 13 has maximum sustained winds near 35 mph with higher gusts. NHC forecasts the depression to strengthen during the next 48 hours, with the depression possibly becoming a tropical storm later Friday.

NHC reports winds of tropical storm force are being reported on oil rigs north and east of the storm's center at elevations of a few hundred feet. The center of the cyclone is expected to approach the coast of southern Louisiana during the weekend. A tropical storm warning is in effect from Pascagoula, Miss., to Sabine Pass, Texas.

The storm system's greatest impact will be on production, as producers have moved to shut in oil and gas supply, but the tropical disturbance will not likely cause major damage to oil and gas infrastructure, said Dan Leonard, senior meteorologist at Weather Services International (WSI). The storm is expected to bring 30-40 mph winds to the Gulf production region east of the mouth of the Mississippi River, even after it makes landfall.

The tropical disturbance in the Gulf is unusual as most systems that go into the Gulf of Mexico usually develop in the Atlantic Ocean or the Caribbean Sea, said Leonard. The tropical depression, which will strengthen over the next 24 to 36 hours, will stall along the immediate Louisiana coast Sunday and Monday before moving up through Louisiana and Alabama at mid-week next week. "The system is significant in that you'll have a long duration wind event in one area for so long."

Tropical Storm Katia, which had previously strengthened to a Category 1 hurricane, is not expected to impact the Gulf of Mexico.

Enterprise Products Partners has shut in its Poseidon and Cameron Highway pipelines due to the storm in the Gulf. The two pipelines have combined actual throughput of 250,000 b/d, with a net impact of 100,000 b/d on Enterprise.

The company also has evacuated workers from its nine operated platforms at High Island Block 85, South Marsh Island 205, Garden Banks Block 72, East Cameron Block 373, Mustang Island Block A-103, Viosca Knoll Block 817, West Delta Block 68, High Island A264 and West Cameron Block 167.

The Cameron Highway Pipeline serves multiple refineries in the Texas City and Port Arthur, Texas areas; Poseidon serves refiners in the Houma, La., area. Both pipelines also connect to other pipeline systems onshore.

The company is monitoring the storm to determine when it's safe to resume operations, said company spokesperson Rick Rainey.

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Oil-Drilling Safety Bill Stalls Amid Fight over Oil Royalties

- Oil-Drilling Safety Bill Stalls Amid Fight over Oil Royalties

Friday, July 22, 2011
Dow Jones Newswires
WASHINGTON
by Tennille Tracy

A group of mostly Republican lawmakers blocked a key vote on legislation to strengthen oil-drilling safety Thursday after efforts to use the bill to steer billions of dollars of oil royalties to coastal states like Alaska and Louisiana appeared likely to fail.

The move postpones an important committee-level vote on offshore safety legislation that has been in the works for more than a year, following the Deepwater Horizon oil spill in 2010.

The delay gives more time to behind-the-scenes deal makers to work out a compromise on so-called revenue-sharing proposals, which would direct nearly 40% of royalty revenue away from the federal government and to the coastal states.

But the delay also raises questions about the fate of the offshore drilling safety legislation and the ability of lawmakers to move that bill to the floor of the Senate.

Events unfolded Thursday at the Senate Energy and Natural Resources Committee, which was scheduled to hold a much-anticipated vote on legislation that steps up enforcement of drilling safety standards and strengthens drilling safety provisions.

Heading into the vote, two coastal senators--Sens. Mary Landrieu (D., La.) and Lisa Murkowski (R., Alaska)--were actively recruiting support for an amendment that would steer 37.5% of oil royalties, which are currently collected by the federal government, to coastal states.

With the federal government reporting more than $5 billion in offshore royalty revenue in 2010, such a move would be a big win for coastal state governments. Landrieu has supported such a proposal for years, arguing that coastal states are entitled to some of the royalty revenue that comes from all production off their shores.

An existing law allows Gulf Coast states to collect 37.5% of royalty revenue on some leases, starting in 2017.

Because Landrieu and Murkowski need the support of at least some Democrats to attach the revenue-sharing amendment to the drilling safety bill, they decided in 11th-hour deal-making to create a fund to promote clean energy. In doing so, they hoped to attract the support of some Democrats, a Republican aide said.

But when a measure to create such a fund failed in the committee Thursday, the chance of success for the revenue-sharing plan decreased substantially. Several Republicans then walked out of the committee room, leaving the committee without enough members to hold a vote and effectively blocking any further action.

The fate of the offshore-drilling safety legislation is now uncertain, said Sen. Jeff Bingaman, a Democrat from New Mexico who chairs the energy committee. When asked by a reporter whether the bill could be revived, Bingaman shook his head and said, "I don't know."

Copyright (c) 2011 Dow Jones & Company, Inc.

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