Storm impact on Gulf of Mexico oil production

It has been reported by the US EIA that the National Oceanic and Atmospheric Administration (NOAA) is predicting a relatively mild hurricane season this year, but even a quiet season like last year can lead to disruptions in crude oil and natural gas production in the Gulf of Mexico. The EIA recently analysed the potential for Gulf shut in production during the upcoming months, given NOAA’s outlook for hurricane activity. EIA’s mean estimate of production outages during the current hurricane season totals 12 million bbls of crude oil and 30 billion ft³ of natural gas, more than three and four times the level hit in 2013, respectively.

Problems with prediction

The above estimates are highly uncertain, as it is difficult to predict the location and intensity of individual storms. If the actual storm activity in the Atlantic Basin falls within NOAA’s predicted range, EIA estimates that Gulf of Mexico outages could total anywhere from 1 – 24 billion bbls of crude oil and 2 – 65 billion ft³ of natural gas. Other possibilities fall outside of this 70% interval. For example, the likelihood of no disruptions this season is only approximately 8%. Conversely, the EIA estimates the probability of seasonal outages exceeding 40 million bbls of crude oil or 100 billion ft³ of natural gas at less than 10%. Even if this were to happen, outages of this size would still be considerably less than those seen in 2005 and 2008, when strong hurricane seasons severely impacted Gulf of Mexico production.

Last season, only one tropical storm, Karen, had any impact on production in the federally administered Gulf of Mexico, shutting in 3.1 million bbls of crude oil and 6.7 billion ft³ of natural gas. The EIA’s analysis expects that even with a mild hurricane season, there is an 69% probability of production outages exceeding those of last year.

Adapted for web by Claira Lloyd

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/13062014/gulf_mexico_oil_production_and_hurricanes/