Hurricane recovery to be 'slower' than predicted in October: EIA

Washington (Platts)--8Nov2005

Recovery from hurricanes Katrina and Rita is taking longer than
anticipated, and "it now appears unlikely that anything close to complete
recovery will occur before the end of the second quarter of 2006," the US
Energy Information Administration said Tuesday.

     "This extends the recovery period by about three months beyond what was
assumed in the previous" Short Term Energy Outlook for October, noted EIA, the
statistical arm of the Energy Department.

      EIA, in its November Outlook, said changes to its recovery projections
were driven by more detailed information on damage to production wells,
pipelines and natural gas processing plants from the powerful back-to-back
storms, which hit the Gulf region in late August and early September. 

     MMS has said that more than 150 offshore platforms have been "heavily
damaged or destroyed" and are not expected to be operational for several
months, EIA noted.

     EIA now projects that shut-in federal Gulf of Mexico output will
gradually decline through March 2006, when shut-in crude volumes should fall
to 353,000 b/d, or 22.6% of pre-hurricane production levels, and shut-in
gas volumes should fall to 2.1 Bcf/d, or 20.6% of pre-hurricane levels.

     Refinery capacity improvements should be more rapid, EIA said, projecting
that capacity should be fully restored to pre-Katrina levels by end-February.

     Onshore Louisiana oil and gas production, which was less than 50% of
capacity at the end of October, is expected to be fully restored by the end of
March, EIA added.

     EIA cautioned that although its recovery projections are based on more
detailed information than had previously been available, "damage assessments
are still underway, and estimates of impacts to oil and natural gas production
remains uncertain."
 				--Cathy Landry, cathy_landry@platts.com

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