Exxon Mobil Corporation (XOM) is taking proactive measures to protect its operations in the face of Hurricane Francine. The company plans to reduce production at its Baton Rouge, Louisiana refinery to a mere 20% of its 522,500 barrel-per-day capacity by Wednesday. This significant reduction comes as Hurricane Francine is projected to pass just east of the facility.
Francine intensified into a full-blown hurricane on Tuesday night, leading Louisiana residents to evacuate inland ahead of its expected landfall on Wednesday. The storm is forecast to bring life-threatening winds, heavy rains, and a storm surge of up to 10 feet (3 meters).
The Baton Rouge refinery, the sixth largest in the United States, is scaling back operations in anticipation of the storm’s impact. Exxon spokesperson Lauren Kight stated, “We’re closely monitoring and preparing for severe weather that may impact our Baton Rouge operations.”
Other major U.S. Gulf oil and gas producers are also taking necessary steps to weather the storm. On Tuesday, Shell announced that it is closely monitoring Tropical Storm Francine and has shut in production at its Perdido, Auger, and Enchilada/Salsa assets due to potential downstream impacts. The company also reported that drilling at the Whale asset, scheduled to begin later this year, has been safely paused.
According to S&P Global Commodity Insights, the U.S. offshore currently produces approximately 1.8 million barrels per day (b/d) of crude oil and 1.9 billion cubic feet per day (Bcf/d) of natural gas. This week, Exxon withdrew from bidding for Galp Energia’s 40% stake in Namibia’s Mopane oil discovery, a find estimated to hold 10 billion barrels of oil and gas, valued at over $10 billion.
Investors seeking exposure to XOM can consider the Energy Select Sector SPDR Fund (XLE) and the iShares U.S. Energy ETF (IYE).
As of Wednesday’s last check, Exxon shares were down more than 1% at $109.67.
