Rita Causes Record Damage To Oil Rigs (New Estimates...Damage Not Bad Huh?)

Financial Times ^ | 9-27-05 | Carola Hoyos

[My Favorite Headache]

Rita causes record damage to oil rigs By Carola Hoyos in London, Sheila McNulty in Houston and Thomas Catan in Johannesburg Published: September 27 2005 20:14 | Last updated: September 27 2005 20:14

Hurricane Rita has caused more damage to oil rigs than any other storm in history and will force companies to delay drilling for oil in the US and as far away as the Middle East, initial damage assessments show.

ODS-Petrodata, which provides market intelligence to the offshore oil and natural gas industry, said it expected a shortage of rigs in the US Gulf this year.

“Based on what we have right now, it appears that drilling contractors and rig owners took a big hit from Rita,” said Tom Marsh of ODS-Petrodata. “The path Katrina took was through the mature areas of the US Gulf where there are mainly oil [production] platforms. Rita came to the west where there is a lot of [exploratory] rig activity.”

Ken Sill of Credit Suisse First Boston said: “Early reports indicate numerous rigs are missing, destroyed or have suffered serious damage and several companies have yet to report. Rita may set an all-time record.”

The US Coast Guard said nine semisubmersible rigs had broken free from their moorings and were adrift.

This damage could not have come at a worse time for oil companies and consumers. US crude futures on Monday fell 37 cents to $65.45 a barrel in midday trading in New York as refineries that were evacuated before the onset of Rita returned to operation.

Earlier in the day, Ali Naimi, Saudi Arabia's oil minister, said the market had not taken up the 2m barrels a day of spare capacity the Organisation of the Petroleum Exporting Countries offered last week. Speaking in Johannesburg, he blamed high oil prices on a lack of industry infrastructure, including rigs and refineries, rather than oil reserves. Rigs, which are movable and are used for exploration and development, were in short supply before hurricanes Katrina and Rita blew through the US Gulf in late August and September.

High oil prices and the desperate search for new oil supplies needed to meet rampant demand from the US and China have made rigs difficult to find and expensive to hire. Rigs cost $90m-$550m to construct, depending on how sophisticated the structure and how deep the water in which it will drill. A rig ordered today is unlikely to be ready before 2008 or 2009, analysts said.

As a sign of just how precious rigs are becoming to the market, Anadarko, the biggest US independent oil company, this week set a record by committing to a rig six years in advance; commitments in the past were made months ahead of time rather than years.

Initial reports from companies are ominous. Global Santa Fe reported it could not find two of its rigs. Rowan Companies reported four rigs damaged, with two having moved, one losing its “legs” and the fourth presumed sunk. Noble has four rigs adrift, with two run aground one into a ChevronTexaco platform.

[Ursus arctos horribilis]

No link, caught it on ABC while surfing the tube channels. Lie was CNN saying there were thousands of missing children. This all the while FEMA and others were stating there were less than ten accounted for.

It appears the children were with different parents or family members, but they were just not all together in one place. With all the MSM in collective hysteria, CNN hyped it up and ran with erroneous stories. (surprise, surprise)

[Ursus arctos horribilis]

"This all the while FEMA and others were stating there were less than ten accounted for."

Pesky fingers, should read "unaccounted for."

[HostileTerritory]

Texas, Louisiana and Mississippi have provided oil for the country for 60 years

And have been handsomely compensated for it, particularly this year.

[thackney]

Texas, Louisiana and Mississippi have provided oil for the country for 60 years

And have been handsomely compensated for it, particularly this year.

IIRC, those states do not receive royalty payments.

[geopyg]

I talked with someone today that was trying to get in on doing submersable imaging of some of the pipelines in the Gulf. Before things can start pumping again the pipeline has to be inspected for damage (perhaps from the dragged anchor lines, etc.?) I imagine there are thousands of miles of pipelines running to the various platforms (is that how most of it works?).

[Chong]

"The media again played down and rushed the story that the oil rigs were not badly damaged...yadda...yadda...move along etc...this article tells another story."

So then, are you saying that your inside report of thousands of dead bodies on trees and in the streets in MS still holds true and the rest of the media are hiding their bodies, much like this oil rig thing? (Why WOULD they, when it's all Bush's fault anyway?)

Do you have any idea what impact your "report" had on people, thinking that the death toll could be in the TENS of thousands according to you? Do you have any idea how many people's heart sank and how many were literally shaking in their seats upon reading your report about the horror of this magnitute

Of course you knew.....

[HostileTerritory]

I did read that they get some share of the oil royalties; I believe 10%. More in line with what I was thinking were the great benefits that have accrued to Houston, and to a lesser extent, New Orleans, as centers of petroleum-related industries.