UpdateOil sheen spotted in Gulf near burning rig – Coast Guard

02 September 2010 20:26  [Source: ICIS news]

(adds updates throughout)

HOUSTON (ICIS)--A mile-long, 100-foot wide oil sheen has been spotted in the Gulf of Mexico near the burning oil platform off the Louisiana coast, the US Coast Guard said on Thursday.

The report contradicted earlier assessments from Vermilion 380 rig owner and operator Mariner Energy that there had been no sightings of a spill, according to news reports.

Houston-based Mariner’s stock was down 54 cents, or 2.3%, to $22.81/share at 14:45 hours New York time (18:45 GMT) on the New York Stock Exchange. Mariner had fallen as much as 16% in the immediate aftermath of the rig incident.

Shares of energy giant Apache, which recently agreed to buy Mariner, were down 1.7% at $90.85/share.

The fire occurred about 9:00 hours Louisiana time, and sent all 13 people aboard the rig into the water, the Coast Guard said. All were rescued.

As of 13:00 hours Houston time, news reports said the fire was still burning. The Coast Guard said Mariner had sent three fire-fighting vessels to the site, noting that one was already in place.

Mariner said in a statement that it was beginning an investigation into the incident and would work with US officials.

Louisiana Governor Bobby Jindal said that he had been told the fire was “nearly out”, according to news reports.

Jindal also said executives from Mariner had told him that the fire on the platform was from flammable material in storage, and that the flow of oil to the platform had been cut off, reports said.

The Associated Press said the platform was in production at the time of the fire, also contradicting earlier reports.

The AP reported that the platform was producing about 58,000 gal/day of oil and 900,000 cubic feet/day of natural gas, with a capacity to store 4,200 gallons of oil.

The Vermilion 380 was operating in 340 feet of water, 102 miles offshore from the Louisiana coast, according to the US Bureau of Ocean Energy Management.

The Vermilion rig was about 200 miles to the west of the BP-operated Deepwater Horizon offshore rig, which exploded on 20 April, killing 11 workers and resulting in the largest oil leak in Gulf history.

That explosion also led to stringent regulations by the US government on deepwater offshore drilling. US environmental group Sierra Club said Thursday's incident was more evidence of the need for US officials to invest in clean energy.

The Financial Times reported that Mariner officials attended a Wednesday rally in Houston to protest the Obama administration’s moratorium.

The Vermilion 380 rig was not affected by the deepwater drilling ban, however, because it was not drilling in deepwater.

NYMEX light sweet crude futures moved higher by $1.11 to $75.02/bbl in the aftermath of the Thursday morning incident.

Additional reporting by Al Greenwood

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