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Hurricane Ike adds to oil chaos

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Hurricane Ike adds to oil chaos

By Sheila McNulty in Houston and Adam Thomson in Mexico,City

Published: September 9 2008 03:00 | Last updated: September 9 2008 03:00

Oil and gas companies restoring production in the Gulf of Mexico were yesterday forced to evacuate offshore facilities for the second time in a week as hurricane Ike moved into the region.

Ike made landfall in Cuba on Sunday and yesterday swept through the country with life-threatening winds of 100 miles per hour and flooding rainfall of up to 20 inches.

Rated a category 3 hurricane when it made landfall, it has since weakened but meteorologists warned that it would re-intensify over the Gulf before making landfall in the US later this week.

The oil and gas companies had only partially resumed their operations following the impact of hurricane Gustav last week.

Royal Dutch Shell yesterday said it had evacuated about 150 people from its offshore facilities, leaving a further 500 personnel in place: “We will continue to bring personnel back to shore, with the intention of completing a full evacuation of personnel from Shell-operated facilities on Wednesday, in advance of Ike.”

Shell had begun to bring some production back online that had been shut off for Gustav, and said minimal production would continue until all production was halted for Ike.

Valero, the US’s biggest refiner, said it had restored its refineries after Gustav, but continued to monitor the path of Ike.

The Gulf is home to more than a quarter of US oil production. The National Hurricane Center’s five-day projection shows the Ike weather system moving towards the Louisiana-Texas border, just west of installations battered by Gustav.

“A lot of them are still shut in, and the concerns might be: ‘Do we want to start up operations and spend the money to ferry and fly crews back out only to pull them back in a couple of days?’ ” said Jim Rouiller, a meteorologist with Planalytics in Wayne, Pennsylvania.

The US government estimated about 80 per cent of oil production and 70 per cent of natural gas production in the Gulf of Mexico remained offline in the wake of Gustav.

“I would not expect that to come back online,” said Kenneth Medlock III, energy expert at Rice University. “It really doesn’t make sense to go out and produce for a day before the next hurricane comes.”

The AccuWeather Hurricane Center noted the hurricane was expected to bring tropical-storm force winds to the Cayman Islands and Jamaica and then the Florida Keys by late yesterday as Ike moved into the Gulf of Mexico.

“Rough surf and dangerous rip currents began along the south-east coast on Sunday and will continue to build early in the week,” AccuWeather said.

A Cuban official said the island was still feeling the full force of hurricane Ike yesterday and was likely to continue suffering the effects until today. But he confirmed there had been no loss of life and that the country’s emergency systems were meeting the challenge.

Mr Medlock said that while keeping much of the area’s production offline should force up energy prices, the Freddie Mac and Fannie May crisis should keep any rise in check.

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