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

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.

Transocean Inc. Provides Update on Gulf of Mexico Fleet Status Following Hurricane Rita

HOUSTON--(BUSINESS WIRE)--Sept. 27, 2005--Transocean Inc. (NYSE:RIG) today reported that its moored semisubmersible rig Transocean Marianas was forced off its drilling location during Hurricane Rita and is grounded in shallow water at Eugene Island block 133 approximately 140 miles northwest of its pre-storm location. An initial assessment of the rig indicates significant damage to the unit's mooring system, but a more complete rig inspection is ongoing. The well was secured and all personnel were safely evacuated before the arrival of the storm.

Also, the company reported that the moored semisubmersible rig Deepwater Nautilus, which sustained damage to its mooring system during Hurricane Katrina and was undergoing repairs, was set adrift following the failure of a tow line utilized by a vessel engaged in towing the rig to a location away from the projected path of the storm. A partial crew on board the Deepwater Nautilus utilized the rig's thruster-assist capabilities to navigate the unit to a location approximately 40 miles south of Grand Isle, Louisiana, where the rig remains grounded. All crew members were safely evacuated. The company will provide more information on the condition of both units, including an estimate of rig downtime, once damage assessment efforts have concluded. The company's two other active moored semisubmersible rigs in the Gulf of Mexico, the Falcon 100 and Transocean Amirante, were safely evacuated and remain on location in the aftermath of the storm. Initial assessments of these two rigs have not revealed any damage. The company's six dynamically positioned rigs successfully moved out of the projected path of the storm prior to its arrival and are in the process of recommencing operations.

Parker Drilling has accounted for all rigs located along the coastal waters of Louisiana following Hurricane Rita. No material damage has been observed based on the assessment of personnel returning to the barge rigs in preparation to re-commence operations. Prior to the storm, all personnel had been safely evacuated, and rigs forecasted to be in the hurricane path moved to protected waters. Additionally, the Parker Drilling facility and the Quail Tools facility, both located in New Iberia, Louisiana, sustained no damage as a result of the storm.
http://www.rigzone.com/news/article.asp?a_id=25555

Horizon Offshore reports that its marine construction vessels located in the U.S. Gulf of Mexico suffered no damage as a result of Hurricane Rita. The Company's shore base facility in Port Arthur, Texas, from which the Company conducted its Human Resources function and fabricates small components to support its pipeline and derrick projects, suffered wind damage to an office building and welding shop. The Human Resources function has been moved to the Company's Houston headquarters.

facility in Sabine Pass, Texas, which supports the Company's Gulf of Mexico barge operations, was flooded. The Company's damage assessment is ongoing, but it has not discovered any significant damage to its equipment there. Both sites are currently inoperable due to interruption of utilities service. The Company's headquarters in Houston, Texas was not affected and is fully operational.
http://www.rigzone.com/news/article.asp?a_id=25558

Pride International Tuesday, September 27, 2005

Pride International says following an aerial inspection of its U.S. Gulf of Mexico fleet, its ten jackups and four platform rigs appear to have suffered no significant damage from Hurricane Rita. The Company expects to have personnel onboard each rig today to complete a thorough inspection and prepare to return the rigs to operation.

The hurricane passed through the Company's operating areas, and the rigs had been secured and all personnel evacuated in accordance with its standard safety procedures.

http://www.rigzone.com/news/article.asp?a_id=25574
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Petsec says Hurricane Rita passed over both the Vermilion 258 and West Cameron 352 platforms, which were both shut-in, in advance of the hurricane.

The Vermilion 258 platform suffered only minor damage. Recommencement of production is dependent on downstream pipelines operated by third parties which remain shut-in, but are anticipated to re-open late in the week.

Inspection of the West Cameron 343/352 platform is expected in the next two days.

Extensive coastal flooding will cause a delay of about one week to the installation of the Main Pass 19 platform, now anticipated for late October.

http://www.rigzone.com/news/article.asp?a_id=25584

Stone Energy reports that due to Hurricane Rita, all offshore drilling and production activities in the Gulf of Mexico were suspended as of Thursday, September 22, 2005. Stone safely evacuated all employee and contract personnel prior to the arrival of the storm. Net daily production of approximately 195 million cubic feet of natural gas equivalent (MMcfe) (down from pre-Hurricane Katrina volumes of 260 MMcfe per day) was shut in as a result of Hurricane Rita.
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Stone conducted an initial flyover of its properties after the hurricane, which indicated that the South Marsh Island 108 D platform and Vermilion Block 255 A and B platforms have been lost. Stone operates a total of 115 structures in the Gulf of Mexico. The net volumes from these platforms were approximately 18 MMcfe per day. Stone is evaluating alternatives for the lost platforms including utilizing existing platforms. Stone is currently assessing other operated platform damage, although it may be several days before information is received on properties and pipelines operated by third parties. Stone's properties and facilities are insured after a minimal deductible; however, Stone does not maintain coverage for business interruption.

http://www.rigzone.com/news/article.asp?a_id=25554

Sounds bad but is 3 out of 115 structures damaged heavily or lost.

You were north of the heavier hit areas, yes? How's the MS recovery coming along from your perspective? Got any thoughts on Gene Taylor's exchange with Mike Brown at the congressional hearings today?

Yes I was out of the way of Katrina.
There has not been a lot of coverage in the last
few days. Mostly focused on making sure the
casinos are safe "next time" and idiot Jim Hood's
lawsuit against the Insurance COs.

I did get this in an email from a friend that has
a restaurant in Belzoni
"as most of you have know , we had tornados in Belzoni this weekend. we are getting back on our feet.
thoughts on this as quoted at the coffee tables this morning.
the Lord sent katrina to new orleans and they ran to houston. the Lord sent rita to houston and they ran to belzoni the Lord sent tornados to belzoni????????? this is from the table of knowledge at the varsity restaurant.
" AND Gene Taylor showed why he is still a democrat.

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