U.S. Offshore Oil Rigs Being Fixed

Dozens of engineers onshore have been controlling two subs nicknamed "Mil-28" and "Mag-77" that are replacing sections of pipelines that were severely dented in Hurricane Katrina. After two months of moving equipment and doing repairs, the work should be completed by next week.

It has been a huge task fixing the pipeline system destroyed by Hurricanes Katrina and Rita. More than a quarter of the region's oil output is still shut down, which amounts to approximately 6 percent of U.S. production.

More than 100 miles southeast of New Orleans, the twin pipelines connect Shell's "Mars" platform, one of the largest structures in the Gulf of Mexico, to a network of pipes that carries oil to the coast. They were crushed when a drilling rig broke free from its moorings during the storm, dragging along a 12-ton anchor that plowed the sea floor.

Shell is one of the top oil producers in the Gulf of Mexico, and the company estimated that it would cost $250 million to $300 million to restore full production. Shell said that three-quarters of its total capacity, 450,000 barrels a day, had been returned to production. But "Mars," which produces about 140,000 barrels of oil a day, is not expected to be restarted until later this year.

However, BP and Chevron have also had a loss of production due to the hurricanes. Chevron lost a major platform during the storm, and announced its production is back to around 300,000 barrels a day. It also announced that as much as 20,000 barrels of oil may never be recovered, and it put its hurricane bill at $1.4 billion, which includes estimated lost production.

Refineries in Texas and Louisiana account for nearly half of domestic energy capacity, and most of those were hurt by the storms. Today, as much as one million barrels a day of capacity, or 6 percent of the total U.S. refining capacity, remains shut down.

The U.S. Energy Department estimates that most of the production should be back on-line by the end of March.