Hurricane Rita's Wrath Hurting Rigs

[cjrciadt]

http://news.moneycentral.msn.com/provider/providerarticle.asp?feed=AP&Date=20050928&ID=5150540
From the article: Credit AP
"DALLAS (AP) - Oil and gas executives say Hurricane Rita may have caused more damage to rigs and platforms than any Gulf of Mexico storm, even its formidable predecessor Hurricane Katrina.

The double-whammy has already cost the Gulf nearly 7 percent of its annual oil production and 5 percent of its yearly natural gas output, according to Wednesday's U.S. Minerals Management Service report.

"The impact on the rigs is something that's never been seen by this country before," said Daniel Naatz, director of federal resources for the Independent Petroleum Association of America.

"Going forward there will have to be significant work getting those areas rebuilt and getting workers back on and in a safe environment."

What this means, industry executives and analyst say, is the country should brace for an expensive winter.

That's because natural gas supplies could take the bigger hit than oil, for there are no reserves in which to tap as there are with crude oil.

Since Katrina struck, the country has received an occasional boost from the Strategic Petroleum Reserve and the Paris-based International Energy Agency.

"This would be a good time to have a warm winter," said Ron Gold, vice president of the Petroleum Industry Research Foundation.

"Where there is pipeline damage, then there is an issue of how do you get the gas ashore as well as the issue of the damaged rigs."

Assessing infrastructure damage is taking longer than post-Katrina efforts with some reports still not expected until late this week and early next week.

Companies were still working on Katrina assessments when Rita bore down on the country's energy hub.

They face some of the same hurdles as consumers and those trying to return to the affected areas: lack of access to the rigs and trouble finding fuel.

The U.S. Minerals Management Service also reported that 593 platforms and 64 rigs still remain evacuated.

That's 72 percent of the 819 manned platforms and 48 percent of the 134 rigs with operations in the Gulf of Mexico.

ODS-Petrodata reported 13 rigs already seriously damaged by Rita.

"You may think that 13 is not significant amount, but this is 10 percent of the contracted fleet out of service for various lengths of time or in some cases permanently," said Tom Marsh, ODS analyst.

"I hate to say with absolute certainty that this is the worst storm damage we've, but we have had more rigs reported with severe damage than any other storm I can recall in the last 15 years."

Marsh said the company's pre hurricane projections had already called for a rig shortage by early next year, but the back-to-back storms could push that shortage to as early as November, he said.

© 2005 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed."