Aug. 27 (Bloomberg) -- U.S. oil and natural-gas companies have begun to evacuate thousands of offshore workers in the Gulf of Mexico as Tropical Storm Gustav, which may become the costliest hurricane since Katrina, heads toward the region.

``We could see 50 percent of Gulf of Mexico oil and gas production shut in,'' said Andy Lipow, president of Lipow Oil Associates in Houston.

Royal Dutch Shell Plc said it will evacuate about 300 non- essential workers today from its offshore operations. The evacuation will have no immediate impact on production, Shell said in an announcement on its Web site.

``Several thousand'' of the almost 20,000 workers on offshore platforms, about one-quarter of whom are needed to maintain production, will be evacuated today, Ted Falgout, director of Port Fourchon in Louisiana, said in an interview. The port is a staging area for offshore workers.

Energy prices rose as the storm was forecast to regain hurricane strength as it moves on a track toward Louisiana and the offshore fields responsible for about a quarter of U.S. oil production and 15 percent of gas output.

The storm packed sustained winds of almost 60 miles (95 kilometers) per hour and was about 125 miles (200 kilometers) southeast of Guantanamo, Cuba, just before 11 a.m. New York time, the U.S. National Hurricane Center said in an advisory. Gustav may strengthen into a hurricane tomorrow.

Storm Track

The Hurricane Center's five-day forecast track shows Gustav crossing western Cuba and heading up toward Louisiana.

Gustav may become a ``destructive hurricane rivaling Rita and Katrina in effect on energy,'' Joe Bastardi of AccuWeather.com in State College, Pennsylvania, said in an outlook today. ``Tracks of storms of this genre include the worst hits on Galveston and Gustav has a chance to join that list.''

Hurricane Katrina, the costliest storm ever to hit the U.S., with damage estimated at $81 billion, struck in August 2005.

Crude oil for October delivery increased $1.44, or 1.2 percent, to $117.71 a barrel at 11:30 a.m. on the New York Mercantile Exchange. Prices are up 64 percent from a year ago. Futures have dropped 20 percent since touching $147.27 a barrel on July 11, the highest since trading began in 1983.

Natural gas for September delivery rose 17.2 cents, or 2.1 percent, to $8.45 per million British thermal units in New York.

Evacuations

Shell, the biggest European oil company, will evacuate about 300 non-essential personnel, the company said on its Web site. The evacuations will have no immediate impact on production.

BP Plc, Europe's second-biggest oil company is evacuating some non-essential workers. Production hasn't been affected, the company said in a recorded message.

Transocean Inc., the world's largest offshore oil driller, is pulling up and securing undersea equipment. The company, which has 1,550 workers on 11 rigs in the Gulf, has evacuated 30 non- essential personnel from three rigs.

Diamond Offshore Drilling Inc., world's second-largest deepwater oil driller by market value, said it was beginning to secure wells in preparation for the storm and had made no evacuations.

Noble Corp., the third-largest U.S. offshore oil driller, began evacuating non-essential staff and will suspend operations at all eight of its rigs in the Gulf of Mexico.

``We will have everyone off of all our rigs by Saturday afternoon,'' John Breed, a spokesman for the Sugar Land, Texas- based company, said in a telephone interview.

Offshore Oil Port

ConocoPhillips, which evacuated its sole Gulf platform, Magnolia, ahead of an unnamed storm last September, is monitoring Gustav, spokesman Charlie Rowton said today in an interview. Magnolia had daily output equivalent to about 33,000 barrels of oil in 2006.

The Louisiana Offshore Oil Port, the nation's biggest oil import terminal, is operating normally, said Barb Hestermann, a spokeswoman for the LOOP, as the port is known. ``It will probably be several days before we make an announcement,'' Hestermann said.

The port, located about 20 miles off the Louisiana coast, has the capacity to receive 1.1 million to 1.2 million barrels of oil a day. The port also handles some domestic offshore production.

Tanker rates for oil shipments from the Caribbean to ports along the Gulf of Mexico have risen 32 percent on speculation Gustav will delay shipping, according to ship brokers Lone Star, R.S. Platou, based in Houston, and Poten & Partners in New York.

Storm Trajectory

Gustav appears likely to strike oil and natural-gas installations in the heart of the Gulf production zone south of Louisiana, said Jeff Masters, director of meteorology at Ann Arbor, Michigan-based Weather Underground Inc.

``It looks like it will grow in intensity as it progresses north, but it's not likely to reach the size of Katrina,'' said Masters, a former flight meteorologist aboard the National Oceanic and Atmospheric Administration's Hurricane Hunter aircraft.

Damage to deepwater rigs, platforms and undersea pipelines may be less than in 2005 because operators are better prepared for winds and high seas, Lipow said.

``The technology and the procedures have improved,'' he said. ``The industry learned a lot from Katrina and Rita.'' Shallow-water rigs and platforms are older and may be more vulnerable to serious damage, he said.

To contact the reporter on this story: Aaron Clark in New York at aclark27@bloomberg.net

Last Updated: August 27, 2008 13:20 EDT