Rita causes record damage to oil rigs


Richard Moore


Rita causes record damage to oil rigs 
By Carola Hoyos in London, Sheila McNulty in Houston and Thomas Catan in 
Published: September 27 2005 20:14 | Last updated: September 28 2005 08:38 

Hurricane Rita has caused more damage to oil rigs than any
other storm in history and will force companies to delay
drilling for oil in the US and as far away as the Middle East,
initial damage assessments show.

Oil prices eased on Wednesday over concerns that demand for
crude would be hit by the continued shutdown of refineries. US
crude fell 27 cents to $64.80 a barrel by 06:444 GMT after
losing 75 cents on Tuesday.

ODS-Petrodata, which provides market intelligence to the
offshore oil and natural gas industry, said it expected a
shortage of rigs in the US Gulf this year.

"Based on what we have right now, it appears that drilling
contractors and rig owners took a big hit from Rita," said Tom
Marsh of ODS-Petrodata. "The path Katrina took was through the
mature areas of the US Gulf where there are mainly oil
[production] platforms. Rita came to the west where there is a
lot of [exploratory] rig activity."

Ken Sill of Credit Suisse First Boston said: "Early reports
indicate numerous rigs are missing, destroyed or have suffered
serious damage and several companies have yet to report. Rita
may set an all-time record."

The US Coast Guard said nine semisubmersible rigs had broken
free from their moorings and were adrift.

This damage could not have come at a worse time for oil
companies and consumers. US crude futures on Monday fell 37
cents to $65.45 a barrel in midday trading in New York as
refineries that were evacuated before the onset of Rita
returned to operation.

Earlier in the day, Ali Naimi, Saudi Arabia's oil minister,
said the market had not taken up the 2m barrels a day of spare
capacity the Organisation of the Petroleum Exporting Countries
offered last week. Speaking in Johannesburg, he blamed high
oil prices on a lack of industry infrastructure, including
rigs and refineries, rather than oil reserves. Rigs, which are
movable and are used for exploration and development, were in
short supply before hurricanes Katrina and Rita blew through
the US Gulf in late August and September.

High oil prices and the desperate search for new oil supplies
needed to meet rampant demand from the US and China have made
rigs difficult to find and expensive to hire. Rigs cost
$90m-$550m to construct, depending on how sophisticated the
structure and how deep the water in which it will drill. A rig
ordered today is unlikely to be ready before 2008 or 2009,
analysts said.

As a sign of just how precious rigs are becoming to the
market, Anadarko, the biggest US independent oil company, this
week set a record by committing to a rig six years in advance;
commitments in the past were made months ahead of time rather
than years.

Initial reports from companies are ominous. Global Santa Fe
reported it could not find two of its rigs. Rowan Companies
reported four rigs damaged, with two having moved, one losing
its "legs" and the fourth presumed sunk. Noble has four rigs
adrift, with two run aground one into a ChevronTexaco

Find this article at: 


If you find this material useful, you might want to check out our website
(http://cyberjournal.org) or try out our low-traffic, moderated email 
list by sending a message to:

You are encouraged to forward any material from the lists or the website,
provided it is for non-commercial use and you include the source.

Richard Moore (rkm)
Wexford, Ireland

"Apocalypse Now and the Brave New World"

List archives:

    "...the Patriot Act followed 9-11 as smoothly as the
      suspension of the Weimar constitution followed the
      Reichstag fire."  
      - Srdja Trifkovic

    There is not a problem with the system.
    The system is the problem.

    Faith in ourselves - not gods, ideologies, leaders, or programs.
Informative links: