Another oil spill?
Shell confident it is not source of Gulf oil sheen
Shell shares clawed back most of its early losses after the oil giant said it had a "high degree of confidence" that its operations are not the source of an oil sheen in the Gulf of Mexico that it estimated to be six barrels.
12 April, 2012
Shares in Royal Dutch Shell had dropped 4pc in London in early trading after the company said it had send a spill response vessel and asked for aerial surveillance to investigate the oil sheen "out of prudent caution", but by mid-afternoon they were down just 0.9pc. They closed down just 0.5pc at £21.74.
Traders said the knee-jerk response on investors reflected concerns that any possible Gulf of Mexco spill might be compared to that which resulted from BP's Deepwater Horizon rig disaster in 2010 - the worst offshore oil spill in US history.
Shell said in an initial statement that the source of the one-mile by 10-mile sheen is unknown and there was no current indication that it originates from wells in either its Mars or Ursa projects. It said its "priority is to respond proactively, safely, and in close coordination with regulatory agencies".
However, in a statement on Thursday afternoon, Shell it had it inspected its operations in the area and their was "no sign of leaks" or "well control issues" associated with it drilling operations.
Bill Tanner, a spokesman, said in an interview with Bloomberg: "This was an orphan sheen. We continue to look to identify the source of the sheen. We have a high degree of confidence that the sheen did not originate from Shell operations.”
Shell operations in the Gulf of Mexico. The Mars platform is about 100 miles south of New Orleans and Ursa is about 130 miles
Shell said it was continuing to cooperate with federal regulators in their efforts to determine the cause and nature of the sheen.
"Although we are confident at this time that the sheen did not originate from Shell operations, out of prudent caution we will continue to respond to the sheen," the company said.
It said the Louisiana Responder, the oil spill response vessel that is was sending to investigate the sheen, is on station and remains ready to respond and over-flights would continue as weather conditions permit.
Shell also has deployed two remote operating vehicles to inspect Shell and non-Shell infrastructure and search for potential naturally-occurring seeps in the area.
The Mars platform is about 100 miles south of New Orleans and Ursa is about 130 miles.
RBC Capital said in a note responding to the news."While the extent of the sheen ... is large and will be a concern, the sheen is light and could result from volume of only a couple barrels …
"We would expect a very efficient response in GoM [Gulf of Mexico] from Shell - if it can show the source is not theirs, and the response is swift, Shell may even turn it into a positive live exercise."
Thursday's Gulf of Mexico scare came on the same day that Shell published its annual Sustainability Report, which revealed the number of operational spills - those related to equipment failure or accidents - at its facilities rose from 195 to 208 worldwide last year, due to a doubling of the number of spills in Nigeria. The volume of operational spills doubled to 6,000 tonnes from 2,900 tonnes in 2010, largely due to a leak at its Bonga facility offshore Nigeria. The number of sabotage spills rose very slightly to 118 but the volume fell, to 1,600 tonnes.
Meanwhile, the North Sea is likely to see an increase in "difficulties" like the gas leak at Total's Elgin platform as more fields mature and require decommissioning, the International Energy Agency (IEA) said.
Total's gas leak began while it was trying to solve problems with the casing of a well that had been plugged and abandoned a year previously. "The problem that Total encountered as it decommissioned an old well at the field is likely to portend difficulties at other mature fields in the medium term," the IEA said.
A report by Douglas-Westwood and Deloitte said almost 500 platforms need decommissioning over the next 30 years.