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After Gustav, companies resume oil production

/ Source: The Associated Press

Oil and natural gas production, virtually shut off in the Gulf of Mexico for the past several days in anticipation of Hurricane Gustav, has resumed, though at very low levels, the U.S. Minerals Management Service said Wednesday.

Based on operators' reports, the MMS said about 4 percent of oil production had been restored, and natural gas output stood at about 8 percent. Some companies with platforms in the western Gulf of Mexico said they had restarted production in the past day.

The U.S. Gulf Coast is home to nearly half the United States' refining capacity, while offshore, the Gulf accounts for about 25 percent of domestic oil production and 15 percent of natural gas output.

Anadarko Petroleum Corp., the largest independent deep-water producer in the Gulf of Mexico, said Wednesday it had resumed production at two of its eight operated platforms, though those facilities were not in the storm's path.

The company was returning workers to its other production platforms — in or near Gustav's path — to continue assessments. Aerial inspections Tuesday indicated the facilities were not severely damaged, but more checks were needed before production could resume, said spokesman John Christiansen.

"We're cautiously optimistic," Christiansen said.

Exxon Mobil Corp. said Wednesday it was returning operations crews to platforms and other offshore facilities not in Gustav's path, and assessment teams to those in the storm's immediate path.

Exxon Mobil also halted operations at two refineries in Louisiana because of Gustav — one in Chalmette, near New Orleans, and the other along the Mississippi River in Baton Rouge. The company said it was unable to provide a restart schedule for either plant.

The status of the Louisiana Offshore Oil Port, a critical link in the nation's energy infrastructure, was still not known.

Gustav appeared to roll directly over the facility, which handles about 12 percent of the U.S. crude imports and is tied by pipeline to about half the nation's refining capacity, much of it along the Mississippi River from the New Orleans area north to Baton Rouge.

As of 9 a.m. EDT (1300 GMT), onshore and offshore operations at LOOP remained suspended, the U.S. Department of Energy reported.

Any prolonged closure of LOOP, as it is called, could severely disrupt crude imports and their shipment to refineries. LOOP is located about 18 miles (29 kilometers) south of Grand Isle, Louisiana.

Of the 31 major natural gas processing plants in the region, 16 that had been shut down have reported no damage and are expected to start up when the flow of gas begins again, according to the Energy Department.