Shell eyes a loss of $400M from Ida

Royal Dutch Shell expects to take a $400 million hit from Hurricane Ida, which damaged a key offshore facility and disrupted the company’s Gulf of Mexico production.

The European oil major said in a third-quarter financial outlook Thursday that the Category 4 storm knocked out 90,000 barrels of oil production per day from the company’s Gulf operations. The company said thirdquarter earnings from oil production will tumble by $200 million to $300 million as a result.

Shell also said it expects earnings in its refinery business to fall by $50 million to $100 million as a result of the storm. The company’s refinery processing capacity during the third quarter is expected to range from 70 percent to 74 percent, down from an earlier forecast of 73 percent to 81 percent and second-quarter capacity of 76 percent.

Ida was the most disruptive storm to sweep the Gulf since Hurricanes Delta and Zeta barreled through last October. U.S. crude oil production fell by 1.5 million barrels per day from Aug. 27 to Sept. 3, according to the Energy Department. Ida shut down as much as 96 percent of crude oil production and 94 percent of natural gas production in the Gulf, according to the Interior Department.

Shell last month said the storm forced 40 percent of its Gulf oil production offline.

Shell this week said it restarted one of its oil production platforms in the Gulf, more than six weeks after the hurricane. The company said partial repairs to a key offshore facility allowed the company to restart its Olympus

oil production platform in the Mars oil field, about 130 miles southeast of New Orleans. A transfer station, which facilitates the company’s offshore production to onshore crude and natural gas terminals, sustained “significant structural damage” during the storm.

Shell said its remaining oil platforms in the Mars oil field remain shut down, pending repairs to the transfer station.

The majority of U.S. oil and gas production has recovered from Ida, but the Energy Department estimated that Gulf oil output fell by a half-million barrels per day to 1.2 million barrels per day last month as a result of the storm.

Shell last month said it expects that full repairs to the transfer station will take until the end of the year and that its Gulf oil production won’t return to normal until early next year.