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Oil companies completing Gulf evacuations

Sun-Aug 31, 2008

Houston / Associated Press

Royal Dutch Shell, BP and other oil companies wrapped up evacuations and shut down production as an intensifying Hurricane Gustav churned toward the petroleum-rich waters of the Gulf of Mexico.

As of mid-day Saturday, slightly more than three-fourths of the Gulf's oil production and nearly 40 percent of its natural gas output had been shut down, according to the US Minerals Management Service, which oversees offshore activity.

Shell said it was on schedule to complete the evacuation of more than 1,300 workers from 20 production platforms and other facilities by Saturday afternoon. The task took four days and involved 17 helicopters.

BP said it also planned to have its workers evacuated on Saturday.

Both oil giants said production was being completely shut off - a process that can involve closing safety valves in thousands of feet of water to prevent the release of oil or natural gas.

Analysts say prolonged supply disruptions could cause a sudden price uptick for gasoline and other petroleum products. Gasoline prices rose this week for the first time in more than a month, and they continued upward yesterday.

How long production remains halted depends on Gustav's path and timing. Frank Glaviano, a Shell vice president who oversees production, said the flow of oil or natural gas usually can resume rather quickly - as long as equipment isn't damaged by the storm.

"It usually takes a couple of days before we can start to get a significant amount of production back up," Glaviano said. "It can take several days for the subsea wells. Typically, about half of our production comes back rather quickly."

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