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Cyclones Slash Australia Oil Output; Ore Port Is Shut

Cyclones off the coast of Western Australia forced the shut down on Thursday of almost half the country's oil production as well as a major iron ore export terminal, with more closures seen as two storms approach oil fields.

At least 180,600 barrels per day (bpd) of offshore oil production was shut in. Australia produced about 418,000 barrels of oil per day in 2006, according to government figures.

Woodside Petroleum, Australia's largest independent oil and gas producer, said it had shut the 100,000-bpd Cossack Pioneer field, part of the North West Shelf venture, and its nearby 7,000-bpd Legendre project.

Operations at its North Rankin and Goodwyn gas fields, also part of the North West Shelf project, are unaffected, as is a separate project, the 40,000-bpd Enfield field, Woodside said.

"We're still monitoring the cyclone tracks and if the cyclone continues its path as forecast, then we will be shutting down production at Enfield," said Woodside spokesman Tony Johnson.

Cyclone George, which is carrying wind gusts of up to 120 kilometers per hour, was upgraded to a category three storm on Thursday. The storm is about 415 kilometers (258 miles) from the Western Australian town of Karratha, the main terminal for the North West Shelf Venture, and could hit land early on March 9, according to Australia's Bureau of Meteorology (www.bom.gov.au).

The bureau said George could reach category four intensity later in the day and extend to areas further south and west on Friday and Saturday.

Second Cyclone

A second cyclone, Jacob, is further out in the Indian Ocean close to the remote Australian territory of Christmas Island. It is heading west at 19 kilometers an hour.

The storms have revived memories of Cyclone Glenda, a destructive category four storm, which forced oil and gas fields to shut down and thousands of people to take shelter when it hit the region last March.

Oil and gas producer Santos has suspended production at its 55,000-bpd Mutineer-Exeter oil field since Tuesday.

Chevron said it had shut down fields on Thevenard Island and will have shut down the Barrow Island fields by the end of Thursday. The Thevenard and Barrow Island fields have a combined output of about 8,000 barrels a day.

BHP Billiton said it shut down its iron ore port operations at Port Hedland and had suspended production at the offshore 10,600-bpd Griffin oil field on Wednesday. Operations at Griffin would only resume in four to seven days when the cyclone passes the coast, a company spokeswoman said.

Miner Rio Tinto said it was only taking precautionary measures at present and that all operations in the area were continuing.

Production at the Cossack Pioneer, Legendre as well as Mutineer-Exeter fields were briefly disrupted in January due to a storm. The six partners in the North West Shelf joint venture are Woodside, BHP, Chevron, BP, Japan Australia LNG and Woodside's 34% shareholder, Royal/Dutch Shell Group .

Nippon Oil, Kuwait Foreign Petroleum Exploration and Woodside partner Santos in the Mutineer-Exeter field.

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