What About the Gulf's Oil Workers?

Before the rigs and pipelines can get back into operation, energy outfits have figure out how to get their employees safely back in place

By Bill Holland

From Platts Oilgram News

As oil and gas producers in the Gulf of Mexico begin the arduous job of restoring operations to their facilities in Hurricane Katrina's wake, they face a hurdle that has nothing to do with busted pipes or drifting platforms: a devastated workforce.

Employees who work on Gulf producing rigs "have suffered significantly" from Katrina, which wiped out tens of thousands of homes, killed hundreds of people, and left much of the Gulf Coast under water, says David Dismukes, an economist at Louisiana State University. Dismukes, who works at the school's Center for Energy Studies, estimated that 65% of the Gulf's 55,000 offshore workers live in Katrina's path.


  Dismukes says one of those employees spoke with him early Aug. 31 from a motel outside Dallas, where he'd taken his wife and children to escape the storm. Now that worker's company is calling him back to his offshore Louisiana post -- but without any accommodations for him and his displaced family.

At least two large Gulf concerns have established hotlines for displaced employees to call. Chevron (CVX ), which says it has 3,000 people in the area affected by Katrina, is asking them to let the company know how and where they are -- and if and when they plan to return.

ExxonMobil (XOM ) says it set up a toll-free number to get a better understanding of employees' status, primary needs, and concerns so as to provide resources for assistance.


  Schlumberger (SLB ) spokesman Steve Harris says it evacuated all of its roughly 200 offshore workers and their families from New Orleans ahead of the storm and housed them in Houston, where the crews were safely waiting to return to work Aug. 31.

Adding to the exploration and production industry's woes is a broader shortage of skilled workers in the drilling sector, Dismukes says. As a result, Gulf producers and contractors "may end up importing labor from other producing regions."

An immediate complication for workers being summoned back to their offshore posts is the clear message from Louisiana state officials: Stay away. "There is just so much displacement. Everyone's working in a 'save lives' mode right now," says Louisiana Natural Resources Dept. spokeswoman Phyllis Darensbourg. "We're working on the basics -- water, communication."


  The damage assessment "isn't just relegated to the gas pipelines, the platforms, the processing plants," analyst Eugene Kim of energy consulting firm Wood Mackenzie says. "It's the highways, railroads -- and the workforce."

Kim's outfit has just begun examining the issues surrounding any necessary reconstruction of the Gulf's energy production region, but "we don't have any history on this. This is a once-in-a-lifetime event."

Veteran energy consultant Matt Simmons offered a blunt view of the problem facing the offshore producing sector. "It's time for the oil companies to start treating their employees like kings," he said in an interview. "Do it now, because they'll be forced to do it in three weeks."


  Workers eventually will come back to rebuild and restart the Gulf's platforms, rigs and pipelines -- despite any personal difficulties caused by Katrina -- because they are an industrious and loyal group, Simmons maintains.

But in the near term, many won't be able to return because of gaps in communications and transportation. "This is going to be a really hard deal," he says, lambasting the industry for concentrating more than one-third of U.S. energy production in what he calls "Hurricane Alley."

Simmons thinks it's time for the big producers, drillers, and other energy outfits to address that vulnerability. "This is the time for the leadership of the oil and gas industry to say 'We're going to fix this.'"

Holland is a reporter for Platts Oilgram News in Washington, D.C.

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