Shell Gulf Platform To Remain Shut Until Year-End After Ida Damage

  • Sep 21, 2021
  • Investing

An offshore platform operated by Shell will remain shuttered until the end of the year following damage sustained from Hurricane Ida, the Anglo-Dutch major has said.

The platform had suffered significant structural damage from the hurricane, Shell also said, adding that another platform that got damaged by the hurricane will be back in operation by the end of the year.

Hurricane Ida recently became the most devastating hurricane to have damaged oil and gas production in the Gulf of Mexico. At landfall, more than 95 percent of oil production was shut down, and this week, more than 20 days after Ida made landfall, as much as 28 percent of production remains offline.

Two oil refineries, each with a capacity of a quarter of a million barrels of crude daily, also remain shut in the wake of the devastation, with rumors circulating that one of them, Phillips 66’s Alliance refinery, may remain shut rather than be rebuilt and repaired.

According to the International Energy Agency, Ida has led to cumulative oil supply losses of 30 million barrels, driving the first decline in global oil supply in five months and pushing global inventories sharply down.

Total U.S. oil production fell from 11.5 million bpd before Ida to 10 million bpd after the hurricane hit the Gulf Coast, according to the Energy Information Administration. In the first week after Ida’s landfall, production only inched up by 100,000 bpd. Full recovery, the EIA estimated, may not take place until next month.

Shell was the company that suffered the most damage from the hurricane, and it will affect its output for the rest of the year and into 2022, the company said this week. As many as three weeks after Ida, some 40 percent of Shell’s offshore production in the Gulf of Mexico remains shut.