OPERATIONS

Katrina to worsen US refinery bottlenecks

GULF of Mexico refineries have been struck heard by Hurricane Katrina. Eight refineries in Louisi...

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The US government warned that it could take months for all affected refineries to re-enter production.

“Some refineries will be able to restart their operations within the next one to two weeks, while others will likely be down for a more extended period, possibly several months,” said the US energy information administration.

The administration said that unlike 2004’s Hurricane Ivan, which had a lasting impact on the Gulf’s crude oil production, it appeared Katrina would pack a bigger punch on the refinery production and distribution system.

A US congressional committee will hold a hearing next week on the impact of the oil refining capacity after the hurricane.

The US already had refinery bottlenecks and no real spare refinery capacity and it is now likely the country will have to import refined petrol from Europe in the short-term.

German economic minister Wolfgang Clement said yesterday that by demanding more oil from Europe, the US would further increase pressure on oil prices.

Clement argued that the US had not expanded its refinery capacity for a long time and its failure to increase its refining capacity was partly responsible for current high oil prices.

He said Hurricane Katrina would only make the situation worse and he hoped the Bush administration would recognise it had to act to encourage the contruction of more refineries.

Meanwhile, in the Gulf Coast region a lack of fuel and pilots meant some companies were still scrambling yesterday to assess the damage to their offshore installations.

Apache announced yesterday it had lost eight production platforms, which collectively produced more than 7000 barrels of oil and 12 cubic feet of gas per day.

BP said that seven of its platforms were missing, accounting for about 1000 barrels of oil production per day. One of BP’s terminals also sustained severe damage after being struck by an unknown object, the company said. The roof of one of the terminal buildings also flew off in the Force 5 winds and hit a pump.

Royal Dutch Shell said a large pumping station in the central Gulf area was damaged, as well as its Mars and Cognac platforms.

About 90% if daily oil output and 79% of daily natural gas output were shut down in the Gulf as of Thursday, said the US minerals management service.

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