The US Bureau of Ocean Energy Management reported on October 8 that, due to Hurricane Isaias, 62.89% of offshore crude oil production in the Gulf of Mexico has been shut in, equivalent to about 1.2829 million barrels per day, while 57.35% of natural gas output has been halted, equivalent to about 1.127 billion cubic feet per day.

As the storm pushes toward the US coast in the northern Gulf of Mexico, energy companies are expanding personnel evacuations and precautionary production shutdowns.

Crude shutdown ratio jumps from 25% to nearly 63% in one day

The latest tally is based on reports submitted by 12 operators as of 11:00 AM Central Daylight Time on October 8, corresponding to midnight Beijing time on October 9. Shut-in volumes are estimated based on the oil and gas quantities operators had originally planned to produce that day.

Statistics from October 7 showed that the Gulf of Mexico crude oil shut-in ratio was 25.08%, involving about 511,600 barrels per day, while the natural gas shut-in ratio was 16.37%.

By October 8, the crude oil shut-in ratio had risen by 37.81 percentage points, with the affected daily production increasing by about 771,300 barrels.

The scope of personnel evacuations has also widened in tandem, with evacuated production platforms rising from 8 the previous day to 121, accounting for 32.61% of the region's 371 manned production platforms. In addition, 5 drilling facilities have evacuated personnel, and 4 dynamically positioned drilling rigs have moved away from their original operating locations to avoid the storm's path.

Shell and Chevron initiate shutdown procedures at multiple facilities

Shell announced on October 7 that, as a precautionary measure, it was evacuating all personnel and suspending production from five offshore facilities: Mars, Olympus, Ursa, Vito and Appomattox, while also evacuating non-essential personnel from the Stones facility.

Chevron has also initiated shutdown procedures at four offshore facilities it operates and evacuated related personnel. In an update on October 7, the company said its remaining five offshore facilities were still operating normally, with some personnel continuing to be transferred ashore.

Shutting in production is a routine measure for the offshore oil and gas industry when responding to severe weather. During evacuations, operators follow procedures to close safety valves below the seabed to prevent oil and gas leaks; some operations can be carried out remotely.

Landfall risk extends to the coast, resumption awaits facility inspections

Meteorological authorities had previously expected Isaias to make landfall between the Mississippi coast and the Florida Panhandle late at night on October 9 to the early hours of October 10 US time, bringing risks of strong winds, storm surge and heavy rain.

Jim Burkhard, head of crude oil market research at S&P Global Energy, said the scale of offshore production cuts is already enough to affect the market, and whether the storm hits near refinery facilities with greater intensity is the risk more worth watching.

The US Bureau of Ocean Energy Management said it will inspect the relevant facilities after the storm. Undamaged facilities can resume production after completing standard checks, while damaged facilities may take longer to return to operation.