Yahoo Finance Shell warns Hurricane Ida disruption will cost it £294 million
Hurricane Ida’s sweep through the Gulf of Mexico has cost Shell $400 million (£294 million), the oil giant admitted today.
Ida hit the Gulf of Mexico and parts of the Southern United States in August. It forced the shutdown off offshore oil rigs and other heavy industry for safety reasons. Shell warned today that the consequences will be a $400 million hit to its third quarter adjusted earnings.
The impact was felt most heavily no Shell’s upstream business, which covers rigs and drilling. Ida reduced Shell’s output by around 90,000 barrels of oil equivalent per day, which could cost Shell as much as $300 million.
In gas production, the company said it expects to produce between 890 and 950 thousand barrels of oil equivalent per day in the third quarter. Earnings are “not expected to be significantly impacted by the prevailing strong gas price environment.” However, Shell said it was expecting a large cash flow bump thanks to high prices.
Shares rose 0.6% in early trade.
Gas prices have risen to all-time highs in recent days and oil is at multi-year highs, thanks to a boom in demand post-pandemic and a supply crunch.
Shell shares have risen 15% since the start of the month, boosted by rallying oil prices. Brent crude is currently at a 3-year high of $81 per barrel and crude has hit a 7-year high.
Elsewhere in the businesses, losses are growing at Shell’s consumer energy arm. Shell Energy Retail saw losses quadruple last year to 138 million, the Times reported. The company blamed “unsustainable, below-cost pricing across the market”. Shell serves almost 1 million retail customers in the UK.
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