EOG Resources, Inc. : EIA : 4.5 Million Barrels of Oil Likely to Be Shut in U.S. Gulf Due to Storms
06/12/2012| 01:08pm US/Eastern
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About 4.5 million barrels of crude oil and 9.5 billion cubic feet of natural-gas production in the federal waters of the U.S. Gulf of Mexico is likely to be shut in due to hurricane season, which started in June and goes until the end of November, government forecasters said Tuesday.
That estimate means that about 24,590 barrels of oil per day and 51.9 million cubic feet of natural gas per day could be offline due to storms, a small portion of the Gulf total oil and gas production. As of March, federal offshore production from the Gulf was 1.4 million barrels of oil per day and 4.4 billion cubic feet of gas per day.
The Energy Information Administration projections for shut?in production during the 2012 hurricane season were derived using a simulation techniques based on information from the latest National Oceanic and Atmospheric Administration seasonal hurricane outlook and an analysis of the production impact from past tropical storms and hurricanes. The agency noted that hurricane-related disruption in the Gulf are difficult to forecast primarily because of the uncertainty involved in predicting both the intensity of severe weather and the affected locations.
NOAA's outlook, released in May, calls for a 50% chance of near?normal hurricane activity this season, a 25% chance of above?normal activity, and a 25% chance of below?normal activity. The outlook indicated that nine to 15 named storms likely will form within the Atlantic Basin, including four to eight total hurricanes of which one to three will be intense. These projected ranges for different types of storms are incorporated into EIA's model of the likelihood for shut?in production in the Gulf of Mexico.
Based on the period 1981-2010, an average season produces 12 named storms with six hurricanes, including three major hurricanes.
Write to isabel.ordonez@dowjones.com
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