Skip to comments.Shell losing $1 billion a year on U.S. Gulf drilling delays
Posted on 02/02/2012 8:07:08 PM PST by Nachum
Royal Dutch Shell Plc, Europes largest oil company, is losing about $1 billion a year from drilling delays in the Gulf of Mexico since the 2010 Macondo disaster.
Shells production in the region will be curbed by about 50,000 barrels of oil equivalent this year, similar to 2011, Chief Financial Officer Simon Henry said. The company expects to return to planned operations off the Gulf coast by 2014.
The cash flow implications are a billion dollars or more per year relative to where we want to be, Henry said in London today. We are catching up.
The company, which in March said it planned to raise output to 3.5 million barrels of oil equivalent a day in 2012, is now warning that production could be lower due to Gulf drilling delays, asset sales and oil and gas prices in the U.S.
(Excerpt) Read more at fuelfix.com ...
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It should be obvious to all but the cretins in the Democrat party that the poseur in the White House is destroying the energy base in our country. The Gulf is locked down because it takes so long to get drilling permits through the dolt Salazar’s, department. Keystone pipeline is stopped for “environmental safety” concerns when the entire affected region has been criss-crossed with hundreds of pipelines for decades.
The First Marxist President is working hard at destroying this economy, and he is succeeding.
The writer here seems somewhat misinformed and is using two separate ideas interchangeably. Production Platforms were not shut down during the Moratorium. They kept producing. Drilling operations were shut down. Now that we have a split of the MMS and new safety regulations, it will take some time to get the platforms up to regulations. But the major cash flow issue is likely due to idle Drilling Rig time and potentially having to re-buy leases, as the government has let some leases expire without adding on time for the moratorium.
But there is just too much left out of this article to know what is really going on for Shell.
“...so I know who’s ass to kick!” ~ Barrack Hussien Obama, 2009
ping to ya...
It takes drilling to maintain total area flow rates in many locations.
I should have added expected production rates are impacted as well from wells that were budgeted and should have been drilled were not.
For more information see:
The State of the Offshore U.S. Oil and Gas Industry
An in-depth study of the outlook of the industry investment flows offshore
American Petroleum Institute (API)
Either the wells are sold to smaller companies which have less overhead and can produce them or stimulate them to recoup their investment and a profit, or the wells are plugged and abandoned.
I don't know how the moratorium and subsequent regulations have affected workover operations, but if those have been stopped or delayed as well as drilling, then there is a solid chance that has hurt every company with operating interests in the region.
Re-buying leases can be a killer, too.
Yeaha, but 50,000 boe worth?
Combined with the new wells that should have come on-line in the same time, yes.