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UPDATE 2-Cyclone shuts about half of Australian oil output
January 27, 2009 / 3:14 AM / 9 years ago

UPDATE 2-Cyclone shuts about half of Australian oil output

(Releads, updates with cyclone’s progress, comments from BHP, Woodside)

By Fayen Wong

PERTH, Jan 27 (Reuters) - A cyclone off western Australia has shut down nearly half of the country’s oil output and disrupted iron ore shipments, but some operators said output was likely to resume by Wednesday as the storm rapidly weakens.

Oil and gas firms operating off Australia’s northwest coast, including Woodside Petroleum Ltd (WPL.AX), BHP Billiton Ltd (BHP.AX)(BLT.L), Santos Ltd (STO.AX) and Apache Corp (APA.N), have in total suspended 218,000 barrels per day (bpd) of oil production since Sunday -- accounting for about 45 percent of Australia’s daily oil output.

The storm also forced miner Rio Tinto Group/Plc (RIO.AX)(RIO.L) to halt iron ore loading at Port Dampier over the weekend, although the firm said it expects to resume operations on Wednesday.

By 0340 GMT, Cyclone Dominic had weakened to become a category 1 storm, the Bureau of Meteorology said on its website. Wind gusts near the centre of the storm were about 100 kilometres per hour (kph), down from around 135 kph at its peak.

“Dominic is rapidly weakening as it moves further inland ... The system is expected to weaken below cyclone intensity in the next three to six hours,” the bureau said.

The region is home to some of Australia’s largest oil and gas projects, among them the North West Shelf liquefied natural gas (LNG) project. Port Dampier is one of the world’s largest iron ore loading terminals, with an annual capacity of about 140 million tonnes.

BHP said it shut down its key Stybarrow oilfield on Monday morning. Woodside has a 50-percent stake in the field, which produced 53,000 bpd in the last quarter. A floating production vessel at the 8,000 bpd Griffin oil field was also disconnected on Sunday, BHP said, adding that the timing of a restart of the oilfields will depend on the progress of the storm.

Woodside has temporarily shut production at its Enfield and Vincent oilfields, which have a combined output of 78,000 bpd. Production at the Woodside-operated North West Shelf LNG venture has also been disrupted with the 52,000 bpd Cossack Pioneer oilfield and the Angel gas platform shut down.

Santos said its 14,000 bpd Mutineer-Exeter project was shut in on Sunday afternoon, while Apache suspended production at its Stag and Ocean Legendre oil fields that have a combined output of 13,200 bpd. Both firms expect operations to resume by Wednesday morning.

Apache said it had evacuated non-essential personnel from the Varanus Island gas processing hub, and while gas output has not been affected, the move will have some impact on the repair work to bring the plant back to full capacity following an explosion last year.

The cyclone is the third of the season, which normally runs from December to April. The previous cyclone, Billy, forced the shutdown of several oil and gas operations for nearly a week late in December.

For a factbox on operations affected by the cyclone, please click on [ID:nSYD36663] (Editing by Kim Coghill) (Additional reporting by James Regan)

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