(Adds details on cargoes, background, updates throughout)
By Devika Krishna Kumar and Florence Tan
Sept 9 (Reuters) - Royal Dutch Shell Plc, one of
the largest operators in the Gulf of Mexico, on Thursday
declared force majeure on some oil deliveries due to damage from
Hurricane Ida, which has crippled U.S. offshore oil production.
More than three-quarters of the U.S. Gulf of Mexico's
offshore oil output remained shut following Ida. Crude buyers
said the full restart of production remained unclear due to
extensive damage to various facilities. The hurricane was one of
the most devastating for offshore producers since back-to-back
storms in 2005 cut output for months.
Shell has a majority stake in the Mars offshore field in the
Gulf of Mexico, where it was still assessing damage that has
kept production offline for nearly two weeks.
"Crews are working to complete a comprehensive assessment of
the damage and to the degree possible, assess how long
production from our Mars corridor assets will be impacted,"
company spokesperson Curtis Smith said in a statement.
Force majeure is a legal provision used by companies during
unforeseen events such as hurricanes when they cannot meet
contractual obligations.
Shell is one of the largest U.S. Gulf producers, with output
of approximately 150 million barrels of oil equivalent per year.
U.S. offshore crude production totaled more than 600 million
barrels in 2020, according to U.S. Energy Department figures.
Asian buyers including China and South Korea have stepped up
purchases of Gulf-produced crude in recent months, and now face
lengthy delays before shipments arrive as oil companies assess
damage from Ida.
China's Unipec, the trading arm of Asia's top oil refiner
Sinopec, is expecting late September and early October
deliveries of Mars crude, the Gulf sour benchmark, to be
disrupted, trade sources said.
The Louisiana Offshore Oil Port, the largest deepwater
export terminal for loading crude oil, also remained offline as
of Thursday. U.S. oil exports sank in the most recent week,
falling to 2.3 million barrels per day, a fall of 700,000 bpd,
as a result of the shut ins.
Shell has started to send personnel to its Appomattox
platform in the gulf while damage assessments are continuing at
its West Delta-143 (WD-143) offshore facilities.
Those facilities serve as the 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)
