Published By : 27 Aug 2012 | Published By : QYRESEARCH
Tropical storm, Issac, with wind speeds exceeding 60 miles is on its way to Cuba, and is expected to turn in to a hurricane as it touches United States Gulf of Mexico. It is expected to threaten oil and gas explorations in the area, and as precautions, operators drilling in the area are shutting down the plants. Despite the luring danger of drop in supply, energy markets are still showing steady performance with only mild variations.
The storm is expected to reach Gulf by Monday dawn, passing through heart of oil and gas productions in the area. Refineries in Mississippi and Louisiana are on Issac’s way of progress to Alabama cost. Major oil companies such as BP, Shell and other producers are shutting down the plants, to avoid any major mishap. Only minimum essential staff is allowed to stay back for the time, the final course of storm is chalked out. The production so far has been unaffected as companies have not yet completely shut-down their operations in the region.
The decision to evacuate the facilities is still to be followed by other producers operating in the Gulf region, who have preferred to observe storm movement for time being. The decision to shut plants has minimal impact on the prices, which was not the case when Katrina and Rita wrenched destruction over energy infrastructure. The dependency on Gulf Natural Gas too has been brought down by almost 10% during the period 2005 – 2012, when earlier it was 17% in 2005, the time Katrina struck.
The discovery and rise in production at on-shore Shell Natural Gas has significantly helped to absorb the demand gap created by closures of facilities in the Gulf of Mexico. The only rise in prices has been due to stricter oil inventories in United States. The actual impact of storm can be estimated only after real time evaluation of actual destruction caused once it passes through the area.