UPDATE 4-As power returns, Texas energy firms slowly emerge from deep freeze
(Adds closing price of oil, new call for probe)
By Jennifer Hiller and Erwin Seba
HOUSTON, Feb 19 (Reuters) - Texas energy companies on Fridaybegan preparing to resume oil and gas production after days offrozen shutdowns as electric power and water service slowlyresumed at darkened oilfields and refineries.
It will take several days for oilfield crews to de-icevalves, restart systems and begin oil and gas production. U.S.Gulf Coast refiners are assessing damage to facilities. Theyface up to three weeks to restore most production, analystssaid, with low water pressure, gas and power losses hamperingoperations.
The restart of production as temperatures eased sent pricesof oil and natural gas lower. The spot market price of naturalgas at the main U.S. trading hub in Louisiana dropped to $8.56per million British thermal units (mmBtu) for Friday deliveryfrom a record high of $23.86 for Thursday.
U.S. crude oil futures settled down $1.28 per barrel at$59.24. Oil is still up 23% this year, boosted by thecontinuation of OPEC supply cuts and falling global inventories.
Grid operator Electric Reliability Council of Texas (ERCOT)said there is enough power generation in its system to return tonormal operations as it ended energy emergency conditions.
Still, refiners along the U.S. Gulf Coast could take up tothree weeks to restore most operations, said Andrew Lipow,president of refinery consultants Lipow Oil Associates. Thatcould depress demand for oil.
Millions of people across Texas shivered in the dark thisweek after a severe winter storm laid siege to the state, withdemand for natural gas spiking and supplies needed to powerelectric generators and heat homes shrinking.
U.S. President Joe Biden sought a major disaster declarationto speed up relief in Texas, and vowed to visit the state nextweek.
Finger-pointing continued on Friday as about 165,000 homeswere without power and more than 1,000 public water systemsremain affected. Texas Republican Governor Greg Abbott blamedthe state's grid operator and wind turbine shutdowns for theoutages. Federal regulators should investigate if the governor'spolicies "exacerbated the winter storm crisis," Democratic U.S.Sen. Charles Schumer said.
Overall economic losses could reach $45 billion to $50billion, estimated weather forecasting firm AccuWeather, nearlyas much as U.S. damages suffered during the 2020 Atlantichurricane season.
Nearly 13% of gasoline stations throughout Texas werewithout either fuel or power as of early Friday, estimated pricetracking service GasBuddy. That was up from around 8.5% about aday ago.
The unusually cold weather curtailed up to 4 million barrelsper day of crude oil production and 21 billion cubic feet (bcf)of natural gas, according to analysts. Texas refiners haltedabout a fifth of the nation's oil processing amid power outagesand severe cold.
U.S. Gulf Coast refineries are potentially less prepared forextremely cold weather than for seasonal storms, creating risksof "more prolonged refining downtime," analysts at Goldman Sachssaid.
The freeze stymied natural gas production by turning waterin the gas to ice. The resulting shortage led to calls for gasconservation measures from California to West Virginia.
Texas on Wednesday ordered gas producers to halt exportsneeded by state utilities through Sunday, prompting Mexicanofficials to call the U.S. envoy to press for natural supplies.
However, pipeline gas exports from the United States toMexico rose to 5.1 bcf on Friday after dropping to a 13-monthlow of 3.8 bcf per day on Tuesday, Refinitiv Eikon data showed.
In the United States, the move did not appear to affectdeliveries to other states. California's power exchange and theMISO, an exchange that handles 15 U.S. states, both said theyhad not seen any impact. New Mexico suffered no losses, a publicregulation commission official said.
More natural gas will soon be flowing. Chevron Corpand ConocoPhillips have begun restoring shale output,and Chevron will prioritize natural gas production. Texas oiland gas regulators and a DiamondBack Energy executive alsoreported that power was being restored to west Texas, where oilproduction was shut by record snowfall and power outages.
"The majority of our Permian and Eagle Ford volumes remainoffline," said Conoco spokeswoman April Andrews, referring tothe two major Texas shale fields.
Conoco, the top U.S. independent oil producer, is ready tobring back full operations across its U.S. operations outside ofAlaska once power and other infrastructure outages end, shesaid.(Reporting by Jennifer Hiller, Erwin Seba in Houston andStephanie Kelly in New York, Swati Verma in Bengaluru; writingby Gary McWilliams; Editing by Leslie Adler, Aurora Ellis,Jonathan Oatis and Dan Grebler)
