Shell storm damage depletes one-sixth of US Gulf oil

Shell has warned that production at two of its largest US fields in the Gulf of Mexico will not resume until next year after Hurricane Ida inflicted “significant structural damage.”

The failure of the largest oil producer in the US Gulf sector will disrupt about 300,000 barrels of daily production capacity, according to Bloomberg Intelligence, or one in six barrels pumped in the region. The disruption is forcing refiners and other buyers to seek alternative supplies.

Ida, a monster storm that hit Louisiana more than three weeks ago and caused deadly flooding from the Mississippi Delta to New York City, continues to stretch already strained supply lines and threatens to trigger a political reaction. US President Joe Biden denounced rising gasoline prices last week and said they would be investigated.

Three weeks after Ida’s landing, 331,078 barrels per day of U.S. offshore crude production in the Gulf – or 18% of the total – remains offline, according to the latest government data.

West Texas Intermediate crude oil futures briefly recovered some losses in New York when announced on Monday before closing 2.3% lower at $ 70.29 a barrel. The price has risen 45% this year.

russian brut

For Shell, the impact will be particularly severe as damage from the storm shut down nearly half of the company’s production in the Gulf of the United States.

Globally, the blackout is already prompting brokers and refiners to seek out grades of crude from as far away as Russia that share similar chemical profiles to some Gulf oils. Crude oil from the oil sands region of Canada as well as Saudi Arabia and Kuwait could also serve as a replacement for lost supplies from the Gulf, said Fernando Valle, analyst at Bloomberg Intelligence.

Shell said its Mars and Ursa platforms will be offline for the remainder of the year after part of its West Delta-143 transfer station was crippled by Ida. The WD-143 carries crude from Mars, other grades of oil and natural gas from several underwater fields to pipelines that carry it ashore.

A separate section of the station is being repaired and will resume operations in the fourth quarter. This will allow the Olympus platform to resume pumping oil before the end of the year.

Recommended for you

Shell’s Field of Mars restart delayed until 2022


Source link

Felix J. Dixon

Leave a Reply

Your email address will not be published. Required fields are marked *