Shell declares force majeure on Gulf deliveries after Ida coup

September 9 (Reuters) – Royal Dutch Shell Plc (RDSa.L), one of the largest operators in the Gulf of Mexico, declared force majeure on some oil deliveries on Thursday due to hurricane damage Ida, which crippled US offshore oil production.

More than three-quarters of offshore oil production from the Gulf of Mexico to the United States remained closed after Ida. Crude buyers said it was unclear whether it would fully restart production due to extensive damage to various facilities. The hurricane was one of the most devastating for offshore producers since back-to-back storms of 2005 cut production for months.

Shell owns a controlling stake in the Mars offshore field in the Gulf of Mexico, where it was still assessing the damage that kept production offline for nearly two weeks.

“Crews are working to perform a comprehensive damage assessment and, where possible, assess how long production from our Mars Corridor assets will be affected,” the company spokesperson said. , Curtis Smith, in a statement.

Force majeure is a legal provision used by companies during unforeseen events such as hurricanes when they cannot meet their contractual obligations.

Shell is one of the largest producers in the Gulf of the United States, producing around 150 million barrels of oil equivalent per year. US production of offshore crude totaled more than 600 million barrels in 2020, according to figures from the US Department of Energy.

Asian buyers, including China and South Korea, have stepped up their purchases of Gulf-produced crude in recent months and now face long delays before shipments arrive as oil companies assess the damage caused by Ida. Read more

Chinese company Unipec, the trading arm of Asia’s largest oil refiner Sinopec, expects late September and early October deliveries of crude from Mars, the benchmark for the sour Gulf, to be disrupted, trade sources said. .

The Louisiana Offshore Oil Port, the largest deep-water export terminal for loading crude oil, also went offline on Thursday. US oil exports have plummeted in the most recent week, falling to 2.3 million barrels per day, down 700,000 bpd, due to the shutdowns.

Shell has started dispatching personnel to its Appomattox platform in the Gulf as damage assessments continue at its West Delta-143 (WD-143) offshore facility.

These facilities serve as a transfer station for all production from Shell’s assets in the Mars Corridor in the Gulf of Mexico to onshore crude and natural gas terminals.

Reporting by Devika Krishna Kumar in New York, Ron Bousso in London and Florence Tan in Singapore; Editing by David Gaffen, Chizu Nomiyama, David Evans and David Gregorio

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