Matthew Rigdon, Executive VP and COO

Currently, offshore activity in the US Gulf of Mexico is still struggling to get back to pre-Hurricane Ida levels. It has now been almost a month since Ida made landfall directly over Port Fourchon where repairing the damaged infrastructure is proving to be a major hurdle. Luckily, the amount of offshore damaged is not as bad as anticipated but the combination port and offshore damage has caused a meaningful amount of oil production in the US GOM to remain shut down.

As of September 23rd, it has been reported that Shell had nearly 40% of its pre-Hurricane Ida production shut-in. Additionally, many rigs that were moved off of location prior to the storm are just now getting back on location and beginning to commence some drilling activities. The work to get production back online and rigs back to drilling has driven some incremental demand for vessel support. Unfortunately, rapid increases in vessel demand will be short-lived and will diminish once pre-Ida activity levels return.

Though this demand may be short-lived, it is projected that that pre-Ida vessel demand and active rig counts will both return to their normal levels. Recent increases in oil prices have been driven by the shortage of supply due to Gulf of Mexico production shut-ins. It will be important to see how supply and demand can re-balance once normal production levels return.