Rigs report: 40% of Shell US Gulf of Mexico production offline

An assessment of Shell’s West Delta-143 (WD-143) offshore facilities, “revealed significant structural damage,” said the company.

“We estimate our WD-143 A platform facilities will be offline for repairs until the end of 2021, and the facilities on our WD-143 C platform will be operational in Q4 2021.”

The WD-143 A and C facilities serve as the transfer hub for production from Shell’s Mars, Ursa and Olympus fields in the US Gulf of Mexico to onshore crude and natural gas terminals. The three fields account for about 300,000 barrels of Shell’s 476,000 barrels of oil produced daily from its facilities in the US Gulf of Mexico.

As a result of the repairs required to WD-143, Shell expects production from its Olympus tension-leg platform will not start until Q4 2021. About 100,000 barrels of oil from Olympus flow through the WD-143 C platform. Production from the Mars and Ursa facilities will not start flowing again across the WD-143 A platform until Q1 2022.

Shell said its Perdido asset in the southwestern US Gulf of Mexico was not disrupted by Hurricane Ida, and its floating production, storage and offloading vessel Turritella (also known as Stones), is operating.

The WD-143 platform, owned by Shell Offshore Inc (71.5%) and BP Exploration & Production Inc (28.5%), is operated by Shell Pipeline Company LP.

Baker Hughes reported there were six rigs drilling in the US Gulf of Mexico for the week, down eight year-on-year.

Commenting on the US offshore oil patch, Rystad Energy oil markets analyst Nishad Bhushan said, “On the supply side of crude oil, the US Gulf of Mexico output recovery is improving day by day post-Hurricane Ida, trimming prices that have risen on the back of production outages.

“The production recovery is gradual but progresses realistically, as indeed some outages are expected to last till the last week of September, with the accumulated loss edging towards 30M barrels for the month.”

Added Mr Bhushan, “The weekly rig count suggested stronger fourth quarter crude oil production in the US, as more rigs were added last week, the second straight weekly gain.”

Looking at the global offshore drilling rig picture, Westwood Global Energy’s RigLogix reported there were 346 jack-ups and 116 floaters under contract for week 38, with jack-ups falling by one unit and floaters gaining two, week-on-week.

The most active jack-up market was southeast Asia, which rose to its highest level of the year, with 35 units contracted.

Deepwater activity remained steady, with West Africa and South America at their highest levels of the 2021, and the North Sea gaining one unit week-on-week to 21.

Despite a drop of US$1.88 for the day, Brent crude oil continues to sell above US$70 per barrel, closing at US$73.92, off 1.88% for 20 September at 5:59 PM EDT, according to Bloomberg.