BP has started evacuating workers from three platforms in the Gulf of Mexico and shutting down production as tropical storm Cristobal approaches the area before landing in Louisiana this weekend.
Reuters reports that the platforms that are being evacuated are Thunder Horse, Atlantis and Na Kika. Thunder Horse has a production capacity of around 250,000 bpd crude oil. Atlantis has a capacity of 200,000 bpd and Na Kika produces approximately 110,000 bpd.
BP is not the only company to evacuate workers. Occidental Petroleum has also started reducing the workforce on its platforms in the central Gulf of Mexico, leaving only the necessary staff. However, Oxy does not cut production.
According to Reuters, other oil companies with a Gulf presence only monitor the progress of the tropical storm, but have not yet started to respond. Refineries along the Gulf Coast are also preparing for Cristobal, Forbes’ Gaurav Sharma reports. The Texas and Louisiana refineries and port authorities in these two states are on standby and ready to begin implementing hurricane protocols. They expect the worst on Sunday.
According to the National Hurricane Center, Cristobal will weaken to a tropical depression in the middle of this week before strengthening again to a storm on Friday and further strengthening on Saturday. Early next week, it is predicted to land in Louisiana and cross oil-producing parts of the Gulf of Mexico.
As strong as Cristobal may be when it flows through oil production areas, it is likely to do less damage this year than hurricanes in previous years as there are fewer oil rigs in the Gulf thanks to cuts in new oil drilling amid the oil price crisis. According to the latest data available from Baker Hughes, the number of oil rigs in the Gulf had dropped from more than 20 in the third week of May to 12 in the previous week.
Energy prices are already reacting in the U.S., with Houston benchmark gasoline moving higher as traders secure supply ahead of the storm. Cristobal could push the average retail price of a gallon of gasoline over $2,