Nexen Provides Initial Damage Report from Hurricane Rita
Nexen stated yesterday that initial inspections of their Gulf of Mexico production facilities have revealed mostly minor damage. Only two platforms - Vermillion 321 and 340 - sustained significant damage. The inspections indicated topside damage to these platforms and further assessments will be required to determine if there is structural damage. Production from these platforms prior to the hurricane was approximately 3,900 equivalent barrels of oil per day. Initial inspections of remaining facilities on the shelf revealed only minor damage.
The deep-water facilities that handle production from Gunnison and Aspen sustained only minor damage and oil production has resumed at Gunnison. We expect Aspen production to resume within a few days once minor repairs are completed and dependant on pipeline infrastructure being available.
Prior to the hurricane, we were producing approximately 50,000 equivalent barrels per day in the Gulf and we expect to continue restoring production over the coming days. Resumption of production from some facilities may be dependant on a more complete assessment of damage and the ability of transportation infrastructure to accept the production.
"Once again, we were very fortunate," said Charlie Fischer, Nexen's President and Chief Executive Officer. "Considering Rita passed between our two deepwater producing assets at Gunnison and Aspen while it was a Category 5 hurricane, and passed directly over our assets in the Vermillion area, the damage could have been more severe. Our ability to restore our volumes will largely be dependant on third-party infrastructure being back on-stream and we will provide a further update on the full impact of Rita on our future production once we have more information."
Nexen carries insurance that, subject to certain deductibles, should cover business interruption arising from property damage as a result of the hurricane.
Exploration drilling operations at Castleton and Knotty Head have resumed following Rita.
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