Hurricane Ida aftermath, oil spill and production disruption in US Gulf Coast

Highlights

  • The US Gulf Coast has struggled to cope up with the impacts of Hurricane Ida even after one week since it hit the coast.
  • The refining and production operations of the oil companies are disturbed with crew shortages and power outages.
  • Saudi Arabia slashed the prices of crude oil for Asian customers in September relative to prices in October.
  • Oil spills a major cause of concern.

The Bureau of Safety and Environmental Enforcement (BSEE) stated that the US offshore energy production continues to struggle to get back on track even after a week since Hurricane Ida made landfall in Gulf of Mexico.

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The lack of crew coupled with power outages at the Gulf Coast has halted the production and refining operations.

However, the situation is recovering gradually, and the O&G companies are trying hard to cope up with the impacts of the devastation that forced them to push the brake paddles to stop their operations at the Gulf Coast.

In the Gulf of Mexico, it is estimated that ~ 83.87 % and 80.78% of the current oil production and gas production, respectively, has been shut in, as per BSEE.

Related Article: Hurricane Ida lashes Louisiana, natural gas output hit

The significant drop in the supply of crude hit the market equilibrium and pushed the oil prices higher by as much as US$1.0 per barrel after the hurricane hit the shore. However, with improved recovery and streamlining of production and refining, the prices again corrected to previous week levels.

Furthermore, the world's leading oil exporter, Saudi Arabia slashed the prices of crude oil for Asian customers in September relative to prices in October due to the lower energy demand in the region amid rising cases of coronavirus and increased supply from the Organization of the Petroleum Exporting Countries and their allies.

Oil Spill a major cause of concern

Following Hurricane Ida hitting the Gulf of Mexico, a sizable oil spill is being reported. As per the United States Coast Guard, clean-up crews are responding to the disaster. Frantic operations are ongoing to locate the source of the leak.

The oil spill was initially believed to be crude oil from an undersea pipeline owned by a Houston-based energy company -Talos Energy. The company has onboarded Clean Gulf Associates to tackle the oil spill. However, Talos, said in a statement issued on Sunday that the busted pipeline does not belong to them.

In the backdrop of this, let's have a look at three ASX-listed oil and gas stocks and their performance.

Woodside Petroleum Limited

Headquartered in Perth Australia, Woodside Petroleum Limited (ASX:WPL) is one of the leading LNG players in Australia. The company has recorded an increase of 108% in the net profit after tax for the first half of FY21 relative to the FY20 first half. The company's underlying net profit was reported at US$354 million while NPAT for the half-year was US$317 million.

Recently, WPL and BHP Group (ASX:BHP) agreed to combine their O&G business through an all-stock merger.

Related Article: It’s Official: BHP-WPL enter merger commitment deed

Oil Search Limited

Oil exploration rig at sunset | Source: © Tebnad | Megapixl.com

Oil Search Limited (ASX:OSH) is headquartered in New South Wales. OSH is one of the leading O&G players in Papua New Guinea. The O&G player has recorded a robust FY21 half-yearly performance underpinned by strong operational performance and a boost in crude oil prices during the reporting period. The company’s revenue during the first half of FY21 was US$667.7 million while its net profit after tax was up 463% from the previous corresponding period at US$139 million.

Beach Energy Limited

Adelaide, Australia-based Beach Energy Limited (ASX:BPT) is one of the major O&G exploration and production companies. BPT has its operations around the globe. The company’s total production in the financial year 2021 stood at 25.6 MMboe, nearly 4% down from the previous corresponding period mainly due to lower production at Western Flank.

Also Read: From BHP to Santos: Where do these ASX energy firms stand in green transition?

The company’s underlying net profit after tax (NPAT) during the financial year was reported at AU$363 million. Additionally, the oil and gas player has also declared a fully franked final dividend of 1.0 Australian cents per share.

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