Port Fourchon Supply Depot Has Concerns About Drop in Oil Prices

A few miles from Grand Isle next to the Gulf of Mexico sits Port Fourchon – a very large supply depot that serves oil rigs and production platforms across a big swath of the Gulf of Mexico. The depot provides a wide range of supplies, from drilling pipe to groceries.

The current, steep drop in oil prices has companies and workers at drilling wells worried. Among the biggest concerns is the question of whether or not the falling prices will leave oil rigs sitting idle.

Says Chett Ciasson, Executive Director of Port Fourchon, "In terms of the drilling side, they may see some impact over the coming year, year and a half. Well, there is some worry."

Chiasson went on to express that “[t]here's been a lot of construction, new builds, especially in drill ships coming out, and a lot of those new drill ships, or some of those new ones coming out in the next year, may not have a contract."

But what Chiasson doesn’t expect is a major impact on production platforms where the drilling segment is completed and the oil is already pumping. According to the Executive Director, "What the oil companies are doing is they're working over the next year to a year and a half on getting a lot of these wells that have been drilled into production."

On the good news side, a recent study on economic impact showed that the Port has been booming for the last ten years, with earnings of almost $3 billion in 2013, and employment of approximately 10,000.

Chiasson expressed, "It's just expansion and constant expansion. I mean we've been one of the fastest growing ports, if not the fastest growing port in the country for the last 15 years due to the deepwater oil and gas industry."

Oil industry leaders don’t see the plummeting prices as a problem in the long run, says Chiasson. In fact, because the Port has almost doubled in size, there is actually such a high demand for space that the Port has another wharf in the works.

But there is reason for concern, and Port officials and company leaders in the Gulf will be keeping a close watch on crude oil prices, with an eye toward maximizing profit despite the plunging prices.