Gulf Rigs Stand Ready as Hurricane Season Arrives

CNBC's Scott Cohn reports about hurricane preparedness onboard a Chevron oil platform the Gulf.
Justin Solomon | CNBC
CNBC's Scott Cohn reports about hurricane preparedness onboard a Chevron oil platform the Gulf.

At a distance from a helicopter hovering over the Gulf of Mexico, Chevron's South Timbalier 52 production platform seems like a speck, and it is easy to see how vulnerable it would be to a ferocious hurricane. Then you land and step out into a giant facility buzzing with activity from dozens of workers, That's when you begin to get a sense of what is at stake.

With the start of the 2013 Atlantic hurricane season kicking off officially on Saturday, Chevron and all the other companies operating in the Gulf are finalizing their hurricane response plans. Those plans could get a lot of use if forecasts for an active season prove accurate.

The South Timbalier 52 facility, 30 miles offshore on the continental shelf, is one of more than 600 Chevron structures in the Gulf. It pumps about 2,900 barrels of oil per day. Around 60 people live and work on the platform, two weeks on and two weeks off. It operates 24 hours a day, 365 days a year, with a full-time kitchen, medical facilities on call, and all the comforts of home—at least the ones that are feasible on an oil rig.

And just like at home, the start of hurricane season is also peak construction season—the time to do maintenance and improvements. Scaffolding covers portions of the structure, and two giant vessels known as lift boats are docked adjacent to the rig for support.

Even the threat of an early start to the storm season—say, a tropical depression 200 miles away, would require all of that to be dismantled in phase one of Chevron's carefully choreographed hurricane response plan, which calls for non-essential personnel and equipment to be moved. Taking down the construction scaffolding is a major project in itself. All of it would have to be disassembled and moved ashore.

"In an event of a hurricane, we'd have to get all this stuff rigged down, should take us about a day and a half or so," said Chevron operations supervisor David Bond, a burly oil rig worker out of central casting, who has worked 33 years offshore and would not trade this life for anything in the world.

"Oh, I love it out here," Bond said.

Hurricane preparations—and evacuations—are all in a day's work. They can happen many times in a season, even though more often than not the storm does not come anywhere close. But the companies cannot afford to take any chances.

The cost of shutting down a rig varies by each structure. On the South Timbalier 52 platform, for example, losing a day of production, during which 2,900 barrels is typically pumped, could cost Chevron as much as $270,000 based on average oil prices this year of $94 a barrel. That's just the estimated cost of production lost, and doesn't include costs for evacuation and re-mobilization. And the South Timbalier 52 is not one of Chevron's biggest producers in the Gulf. Some platform's losses could be millions of dollars a day. Chevron said decisions ahead of hurricanes are based solely on safety, and not money. Chevron Vice President Warner Williams said of safety versus costs: "It's not a balance. I would say we can always get the production. The key thing is to get the folks off safely in the time allotted to us to do that."

As a storm gets closer—or forecasts call for it to come anywhere near the facility, the support staff—the so-called non-essential workers—are airlifted ashore. That leaves a core group of production workers and supervisors in the final phase of the evacuation plan. Bond has been in that position many times, and he admits it can get a bit eerie.

"It starts to get almost kind of lonely out here," Bond said. "We are used to all these guys being here; we live with them day in and day out so when they leave almost a part of us leaves with them. Then we get down to our skeleton crew, which we are never at our skeleton crew unless a storm is coming. Well, then it starts to kind of hit home a little bit that we gotta leave. We start worrying about our families and things like that but then we kick into phase three and the professionalism kicks in."

The control room of the platform looks like little more than an office, with a couple of desks and computer terminals. But in many ways it is the heart of the operation. Here, workers can control every well and valve attached to the platform. Everything must be shut in and secured before the last workers leave. Even a small mistake, combined with the fury of a hurricane, could trigger an environmental disaster. That is why it is important to stay focused, Bond said.

"We start getting calls from home, wives, and kids wanting to know when we are coming in well that starts to get a little bit tough but you have to work through it and be professional."

Not easy, Bond said, with rising waves and escalating winds—on a vulnerable oil rig in the middle of the Gulf.

"Some of the newer guys who have not been through a lot of storm seasons so we kind of mentor them and bring them along with us. They don't see us getting scared, or whatever. They tend to not want to show it either. It's almost like your brothers--you don't want to show that you are emotional so we keep it light, play jokes on each other."

A similar routine is playing out on the more than 600 structures Chevron operates in the Gulf, ranging from small rigs to deep water platforms and drill ships. Some 2,500 people are working for Chevron in the Gulf on a normal day. If a hurricane or even a tropical storm enters the Gulf, every facility must be secured and every worker must be brought ashore—a massive undertaking.

Most of the workers are airlifted to shore. Because Chevron—unique among the major oil companies—owns its own fleet of helicopters, that challenge falls to the company as well.

The operation is choreographed from a sophisticated command center in Covington, Louisiana. The facility, opened in 2008, is roughly 100 miles inland—a lesson from Hurricane Katrina in 2005, when the previous facility in downtown New Orleans flooded.

Here, teams of managers make minute-by-minute decisions about evacuations. And while shutting an oil well at the mere hint of a storm is an expensive proposition, officials insist safety is the overriding concern. Nonetheless, the system is set up to keep supply disruptions to a minimum with the help of the technology in the new command center.

The facility includes sophisticated computer screens that allow workers to track every vessel, every facility, and most important, every individual working in the Gulf, almost in real time.

Chevron's Williams said that used to be done with Post-It notes on a map. The macabre joke—and an argument for a better system—used to be that if one of those notes falls behind a desk, all those people are missing.

"One of the things that we have done over time is to make better decisions and utilize our equipment better," Williams said. "Being here in this location, being in a building that is highly technical has been a big benefit to us."

Another room in the command center is filled with computer terminals just like the ones in the control room on the South Timbalier 52 platform. There is one desk for every major rig, allowing the facilities to be operated by remote control. In fact, operators from evacuated rigs are brought here so they can monitor their equipment and make certain it has weathered the storm—even operating some of the equipment by remote control.

"We can now talk to every platform we got, every asset we got, whether it be a helicopter or a boat," says Chevron general manager Mike Casey.

That capability is especially important after the storm passes, when Chevron needs to get its production back up to speed as quickly and efficiently as it shut it down. But the re-mobilization or "re-mob" is often much more complicated than the evacuation, because they need to make certain the offshore equipment is still safe to operate—and live in.

And unlike the evacuation plans that are in place before hurricane season begins, they can not come up with a re-mobilization plan until after they know what damage the storm did.

Plus, some workers may be unable to get back offshore if their homes were damaged in the storm. But operations supervisor David Banks said workers worry about their second homes—the ones offshore—almost as much as their own homes, and they want to get back to work..

"Once we leave here," he said, "we gotta stay in touch with each other because we'll be coming right back as soon as the storm passes."

More On Hurricanes:
Atlantic Hurricane Season Begins Tomorrow
How Storm Will Affect Investors: 'Month to Remember'
Scenes From Hurricane Sandy
Here's Why Sandy Is Such a Monster Storm

_By CNBC's Scott Cohn. Follow him on Twitter at @ScottCohnCNBC.