U.S. offshore oil output to restart after pipeline fix

Aug 12, 2022

(Bloomberg) Chevron Corp. is restarting production at three Gulf of Mexico oil fields after a key crude pipeline resumed flows.Multiple offshore platforms were shut in Thursday after a leak at Louisiana booster station halted Shell Plc’s Amberjack and Mars pipelines, which together can move up to 500,000 barrels of oil a day from the Gulf to the coast.

Amberjack, which is jointly owned by Chevron, resumed operations Friday and is flowing at reduced capacity, a Shell spokesperson said. Mars is expected to be up by 4pm central time, according to people familiar with the matter.

Chevron has so far resumed production at its Jack/St. Malo, Tahiti and Big Foot platforms. Other shuttered assets include Shell’s Mars, Ursa and Olympus fields and Equinor ASA’s Titan platform, the companies said. Murphy Oil Corp. also shut some platforms, a spokesperson said.

ROO.AI Oil and Gas Field Service Software

If both pipelines return to service on the expected timeline, production losses will be minimal, according to Energy Aspects.

The shut-ins come at a time when global energy supplies are exceedingly tight. While US crude inventories have been cushioned by the government’s tapping of emergency oil reserves, stocks nevertheless remain below the five-year average. Supplies could tighten further, with the International Energy Agency forecasting that oil demand will accelerate this year.

Prices for Mars Blend crude, a regional sour crude benchmark, strengthened Thursday before easing Friday. At the same time, Gulf of Mexico dry-gas production fell about 10%, the most since January, according BloombergNEF estimates based on pipeline flows.

(Adds Amberjack rates. A previous version corrected the Energy Aspects production impact estimate in the fourth paragraph to “barrels” from “barrels a day.”)