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Shell Report Upstream Ops in Western Gulf Mexico Reopened

Shell LogoRoyal Dutch Shell (RD) said on Friday that production is now flowing and ramping up from all Shell-operated assets in the Western Gulf of Mexico (GoM) that were shut in because of Hurricane Katrina.

Upstream Operations:
Production is now flowing and ramping up from all Shell-operated assets in the Western Gulf of Mexico (GoM) that were shut in because of Hurricane Katrina. Production has resumed at Auger, Brutus, Bullwinkle, Cougar, Enchilada, North Padre Island and West Cameron 565. In the Eastern GoM, the Fairway asset and Yellowhammer Gas Processing Plant near Mobile Bay are operating normally.

Shell's net GoM production from Shell-operated and outside-operated fields for the first half of 2005 averaged around 450 thousand barrels of oil equivalent per day (kboe/d). Currently, Shell's net GoM production has returned to approximately 160 kboe/d. Significant efforts continue as comprehensive assessments as made of hurricane-impacted assets (Mars, Ursa, Cognac, and West Delta 143) as well as of pipelines and other related onshore processing/handling facilities that transport and receive production.

Pending full assessment and evaluation of infrastructure and assets, it is expected that about 60% of total production will be restored to pre-hurricane levels within Q4, 2005. The situation with respect to the remaining production, mainly from the Mars and Ursa area, Mensa, and Cognac, is still being assessed, but production from these facilities may not be feasible during the fourth quarter, depending on options available for recovery.

Downstream Operations:
Refineries
Shell and Motiva operate 7 refineries in the US with overall crude throughput of approximately 1 million barrels per day (bbl/d). Two Motiva refineries, Motiva Convent and Motiva Norco, representing about 27% of Shell's US refining capacity (net) were impacted by Hurricane Katrina. These refineries normally supply retail and other customers mainly in the PADD III Gulf Coast area.

The Motiva Convent refinery has completed repairs and initiated its restart sequence. It is expected that the refinery will be brought back towards full production over several days. Full production rates are expected to be achieved by the end of next week. The Motiva Convent refinery has a capacity of 235 thousand bbl/d of crude throughput (Shell share 50% = 117.5 thousand bbl/d).

Repair work continues at the Motiva Norco refinery and restart of operations could begin the middle of next week. The Motiva Norco plant has a capacity of 220 thousand bbl/d of crude throughput (110 thousand bbl/d = Shell share 50%).

Other Gulf Coast Shell refineries in Deer Park (334 thousand bbl/d = Shell share 50%) and Port Arthur (275 thousand bbl/d = Shell share 50%) are not affected.

Chemicals
Shell Chemical LP is continuing to make progress in restoring operations. The Geismar, Louisiana chemicals plant is operating at 60% of its capacity, limited by offsite logistics issues. Geismar (Shell share 100%) produces first line derivative products. Full capacity is expected as logistics become available.

The Mobile facility in Alabama is in its final start-up phase. Mobile (Shell share 100%) produces base chemical feedstocks and fuels.

Norco (Shell share 100%) produces base chemicals and other products. More definitive information on start-up dates will be available in the coming days as start-up plans are developed jointly with the refinery.

Terminals and Retail
Terminal operations are nearly up and running across the affected area. Movement of product into Shell retail stations continues to be a significant challenge.

Work is in progress assessing the full impact of the storm on the Shell network, and great efforts are being made to keep product flowing. Motiva has taken specific actions to help control prices in the affected areas and is also taking strict measures against price gouging by any of the Shell branded locations.

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Posted 12/09/05

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