As some oil and gas companies were still working to fully recover from 2004's Hurricane Ivan, Katrina blazed across the Gulf, leaving a trail of destruction in its wake. Offshore driller Rowan Cos. Inc. lost one of its 22 rigs. Other companies did not fare as well, and Danny F. McNease, Rowan chairman and chief executive, pointed out that the timing of the storm was made even worse by current boom market conditions. Before Katrina, the Gulf was home to 819 manned production platforms and 137 drilling rigs. "For previous storms we could get [surplus] rigs to go out and continue to do the work, but right now all the available rigs are already out there working," McNease said. "It will be interesting to see how many rigs are lost, but also what's happening out there with the platforms. "We've heard that for many pipelines, the pressure is low. Folks doing flybys are seeing bubbles rising to the surface, and that isn't good. It's going to be a huge challenge to this industry to fully recover." It may take months to fully assess the damage, according to Tony Mayer, managing director, and Andrew Kadin, senior vice president, for the marine and energy practice at insurance-services firm Marsh Inc. "We have found that these initial damage reports can be deceptive," Mayer says. "Aside from platform damage you have a scouring-action effect on subsea pipelines. There is no way to know the full extent of the damage at this time." Kadin adds, "Several companies were still repairing several miles of pipeline damage from Ivan. Ivan was a Category 4 [storm] and Katrina was a 5. I think we are going to see that Katrina did much more damage...." For more on this, see the October issue of Oil and Gas Investor. For a subscription, call 713-993-9320, ext. 126.
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