Hurricane season is having an effect on oil drilling in the Gulf of Mexico, and we haven't even seen a major hurricane in the Gulf yet. But with oil drilling safety a new focus, it's better to be safe than sorry.
Tropical Storm Lee forced the evacuation of 239 production platforms over the holiday weekend, accounting for 38.7% of the platforms in the Gulf of Mexico. Twenty-five of the drill rigs owned by Hercules Offshore (Nasdaq: HERO), Transocean (NYSE: RIG), Seadrill (NYSE: SDRL), and others were also evacuated.
As of now, it appears that just over 60% of oil production and 41% of natural gas production in the Gulf of Mexico has been shut down. But workers are already starting to get back to work.
More than 100 platforms have brought workers back on board, along with 13 drill rigs. Production hasn't started to ramp up because platforms and rigs need to be inspected before work begins again, but that shouldn't take long because damage should be minimal.
The season isn't over
We aren't quite out of the woods yet. Tropical depression 14 is on its way through the Caribbean this weekend, and we aren't generally out of hurricane season until the end of November.
Gulf producers such as Chevron (NYSE: CVX), Apache (NYSE: APA), and BP (NYSE: BP) are champing at the bit to get workers back out to platforms and begin production again. The Gulf of Mexico produces about 30% of U.S. oil production, and a Gulf region that's still recovering from manmade and natural disasters could use the work.
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