EIA predicts US Gulf oil shut-ins to be 297,000 b/d in March

Washington (Platts)--6Dec2005

Crude oil production shut-ins in the US Gulf of Mexico should decline
from about 504,000 b/d later this month to about 297,000 b/d by March 2006,
the US Energy Information Administration forecasted Tuesday.

     EIA also said shut-in natural gas production should dive from December
levels of around 2.7 Bcf/d to 660,000 Mcf/d. 

     At that recovery pace, 19% of Gulf crude output and 6.5% of natural gas
production would remain shut in as a result of damage from the powerful
back-to-back hurricanes Katrina and Rita, EIA noted in its Short Term Energy
Outlook for December.

     Currently, about 36% of offshore oil production and 27.16% of natural gas
production in the Gulf of Mexico is shut-in. Onshore Louisiana, 40% of the
pre-hurricane oil and gas output is still shut in, but that production is
expected to be fully restored by the end of March, said EIA, the statistical
arm of the US Energy Department.

     Of the refineries taken down by the storms, only two in New Orleans and
one in Houston remain out of service, EIA said, adding that all three are
expected to be operating by the end of February.

     Offshore Gulf of Mexico natural gas supply has been disrupted because of
hurricane damage to production platforms, subsea pipelines and to onshore
processing plants, EIA said. "However, the interconnectivity of the natural
gas gathering system has helped speed the recovery of shut-in production as
suppliers reroute gas flow around damaged pipelines to active processing
plants," the agency said. "Consequently, in this Outlook we have accelerated
the recovery of the natural gas supply system from our November Outlook
prediction."

     Gulf crude oil production has recovered at a slower pace than natural
gas, EIA said. It said that while the majority of platform repairs are
projected to be completed by the end of 2005, some of the largest oil
platforms damaged by the hurricanes are projected to remain out of service
through the second quarter of 2006.

     Still, "crude oil production is projected to continue to recover at a
slightly faster pace than previously predicted," EIA said.

				--Cathy Landry, cathy_landry@platts.com

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