Royal Dutch Shell on Monday said two of its largest platforms in the US Gulf of Mexico, Mars, and Ursa, would unlikely resume production until 2022 due to “significant structural damage” from Hurricane Ida in late August. Shell said damages in the West Delta-143 transfer station prevented it from funneling Mars crude and other oil grades and natural gas from several fields to pipes that carry it ashore.
Market participants estimated the outage could disrupt about 300,000 bpd or one-sixth of output capacity in the Gulf. That also represents about 50% of Shell’s production in the region. US regulators said 331,078 bpd or 18% of offshore crude oil production in the US Gulf of Mexico remained offline three weeks after Ida made landfall.
Shell’s outage is expected to prompt buyers to seek alternative crude grades. Traders said Russia’s Urals emerged as the main alternative to Shell’s Mars along with other grades from Canada, Saudi Arabia, and Kuwait.
