From: Reuters
Published December 28, 2007 03:47 AM

First West Australia cyclone forms

SYDNEY (Reuters) - The first cyclone of the West Australia storm season formed offshore on Friday, the government weather service said, serving a reminder to oil firms and miners of the potential for disruptions over the next four months.

Tropical cyclone Melanie developed in the ocean about 600 km (370 miles) north-west of the seaside community of Broome, according to Australia's Bureau of Meteorology.

Melanie is the first storm of the November-to-April season to form in Australia's 'cyclone alley', which is also home to the world's biggest iron ore deposits and major oil and gas fields. Normally the area sees about five storms each season.

The storm was rated at the lowest end of the five-step intensity scale, Category 1, with wind speeds up to 88 kilometers per hour and gusts up to 125 km per hour, the bureau said.

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Major miners including Rio Tinto Ltd, BHP Billiton Ltd/Plc and Fortescue Metals Group Ltd, as well as oil firms like Woodside Petroleum Ltd, are sometimes forced to halt production briefly during the season.

"At this stage, we're monitoring developments very closely," a spokesman for Rio said. "We take these storm warnings very seriously."

During the last cyclone season, Fortescue was forced to shoulder more than A$100 million ($87 million) in construction cost overruns and shipment delays from its Pilbara iron ore project after three storms smashed into its operations, destroying work camps, flooding roads and killing two workers.

Woodside, Australia's second-largest oil producer, said it would keep a close watch on the weather, though its offshore oil and gas operations had so far been unaffected by bad weather.

"We are making preparations in case there is a need for evacuation but we haven't done that at this stage," said a Woodside spokeswoman, Kirsten Stoney.

In March, a powerful cyclone forced oil companies, including Santos and BHP to shut about 180,000 barrels a day of production, half of Australia's output, for nearly a week.

(Reporting by James Regan and Fayen Wong)

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