Oil facilities spared by Gustav

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Oil and gas companies are reviewing the damage Hurricane Gustav unleashed in the Gulf of Mexico, but for the most part the storm s impact on their facilities did not mirror that of 2005 s Katrina.

Gustav made landfall about 72 miles south of New Orleans on Monday morning, but was downgraded to a tropical depression early Tuesday.

Louisiana Governor Bobby Jindal said as much as 20 percent of oil and gas production that was stopped because of Gustav could be restored by this weekend, though he stressed that was a rough estimate.

The first-term Republican said state officials were planning an aerial tour on Tuesday to gauge damage to Port Fourchon, a vital energy industry hub where huge amounts of oil and gas are piped inland to refineries.

The Gulf accounts for about 25 percent of domestic oil production and 15 percent of natural gas output.

"As reports continue to stream in over the course of the day, we have to suspect that most refineries will report minimal physical damage, although operational and logistical difficulties will take more time to rectify," MF Global, a commodities brokerage, said in a note to clients.

ConocoPhillips Co. said that remote monitoring of its Magnolia platform -- which is far off the Louisiana coast -- shows no significant damage, and that a flyover is planned. Two of its refineries remain shuttered, but supply is strong in Texas, Mississippi and Louisiana, the company said.

"We are also monitoring areas where evacuees are headed, such as Arkansas and Tennessee, and do not anticipate any issues meeting the increased demand in those areas," ConocoPhillips said.
Shell also plans a flyover of its Gulf of Mexico facilities on Tuesday to assess whatever damage Gustav may have caused.

"Once power and communications are restored, marine logistics support is established and the offshore location is deemed safe, then personnel will commence restart and production ramp up procedures," the company said in a statement.

A complete return to full production may take up to five days, Shell said.
Chevron Corp. said its Pascagoula, Miss., refinery operated safely as the storm tracked through the Gulf, but that operations have been reduced until the channel used by tankers to reach the location reopens.

Exxon Mobil said it will begin post-storm reviews as soon as it is safe, and that for now, daily production of 37,000 barrels of oil and 600 million cubic feet of natural gas is suspended.
"Once we can ensure that our systems are both safe and operational, we will begin the process of returning to normal operations," the company said.

And Swift Energy Co. said it also plans a flyover of its own facilities.
On the New York Mercantile Exchange, light, sweet crude for October delivery fell $8.14 to $107.32.

"With the fear of Gustav now gone, a downside speed bump will have effectively been removed as far as crude oil prices are concerned, and we expect values to start tracking lower once again," MF Global said.