Oil, Natural Gas Evacuations Start as Gustav Advances

(Bloomberg) — U.S. oil and natural-gas companies have begun to evacuate thousands of offshore workers in the Gulf of Mexico as Tropical Storm Gustav, which may become the costliest hurricane since Katrina, heads toward the region.

“We could see 50 percent of Gulf of Mexico oil and gas production shut in,” said Andy Lipow, president of Lipow Oil Associates in Houston.

Royal Dutch Shell Plc said it will evacuate about 300 non- essential workers today from its offshore operations. The evacuation will have no immediate impact on production, Shell said in an announcement on its Web site.

“Several thousand” of the almost 20,000 workers on offshore platforms, about one-quarter of whom are needed to maintain production, will be evacuated today, Ted Falgout, director of Port Fourchon in Louisiana, said in an interview. The port is a staging area for offshore workers.

Energy prices rose as the storm was forecast to regain hurricane strength as it moves on a track toward Louisiana and the offshore fields responsible for about a quarter of U.S. oil production and 15 percent of gas output.

Bloomberg