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BP, Chevron Shut Offshore Facilities Prior to Ian's Landfall

BP Plc BP and Chevron Corporation CVX have discontinued production at their offshore oil platforms in the Gulf of Mexico, following Hurricane Ian’s landfall in the world’s most important petroleum production region.

Ian is the first major hurricane this year to threaten the nation’s largest concentration of refineries, petrochemical facilities and offshore platforms.  The storm is expected to disrupt hydrocarbon production in the U.S. Gulf of Mexico, which accounts for 15% of the nation’s crude oil and 5% of dry natural gas.

BP closed and evacuated every employee from the 130,000-barrels-per-day Na Kika facility. The company operates the Na Kika platform with a 50% working interest. BP is also shutting down the 250,000-barrels-per-day Thunder Horse platform and relocating non-essential workers.

BP’s Na Kika and Thunder Horse facilities can produce 550 million cubic feet per day (mmcf/d) and 200 mmcf/d of natural gas, respectively. BP will closely monitor the storm’s activities that could impact its operations in the deepwater Gulf of Mexico.

Chevron started evacuating workers from its Petronius and Blind Faith platforms. The platforms can produce 105,000 barrels per day of oil and 90 million cubic feet per day of natural gas. Production at Chevron’s other Gulf of Mexico facilities remained at normal levels.

Hurricane Ian is expected to reach its peak intensity over the southeastern Gulf of Mexico. The hurricane-force winds will likely last longer due to the storm’s slow forward speed. Hence, shutting down the refineries can limit the damage that could disrupt the fuel supplies for an extended period.

Price Performance

Shares of the company have outperformed the industry in the past six months. The stock has lost 9% compared with the industry's 11.4% decline.


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Zacks Investment Research

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Zacks Rank & Other Key Picks

BP currently carries a Zack Rank #2 (Buy).

Investors interested in the energy sector might look at the following companies that presently sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Equinor ASA EQNR is one of the premier integrated energy companies in the world. For 2022, EQNR announced the increase of the share buy-back program of up to $6 billion from the prior stated $5 billion.  Also, the energy major’s board increased its extraordinary cash dividend to 50 cents per share for the second and third quarters of 2022.

Equinor has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 60 days. The company currently has a Zacks Style Score of A for Growth and Value, and B for Momentum. EQNR is expected to see earnings growth of 105% in 2022.

Range Resources Corporation RRC is among the top 10 natural gas producers in the United States. RRC’s board of directors authorized a $500-million share repurchase program, which is likely to be funded with the company’s free cash flow.

Range Resources has witnessed upward earnings estimate revisions for 2022 and 2023 in the past 30 days. The company currently has a Zacks Style Score of A for Growth and Momentum, and B for Value. RRC is expected to see earnings growth of 171.8% in 2022.

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Chevron Corporation (CVX) : Free Stock Analysis Report
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Equinor ASA (EQNR) : Free Stock Analysis Report
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