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Shell expects 200m dollar hit from Texas storm that killed dozens
7 April 2021, 08:04
The company was forced to close its oil refinery in February, and production is expected to have fallen.
A snowstorm that swept across large parts of North America, knocking out sections of Texas’s electricity grid, has cost oil giant Shell millions, the company revealed on Wednesday.
Shell said the Texas storm would have an adverse impact of up to 200 million US dollars (£145 million) on its adjusted earnings in the first three months of the financial year.
The weather knocked out parts of its production in the Lone Star State in February, and its upstream business now expects to produce between 2.4 million and 2.475 million barrels of oil or equivalents per day.
This is approximately 10,000 to 20,000 barrels per day fewer than normal due to the effects of the storm.
At least 100 people, possibly almost 200, died in Texas when the storm knocked out large parts of the state’s electricity grid, leaving millions without power.
Democrat politicians have blamed the state’s deregulated electricity grid for the problems.
The Houston Chronicle reported that 16 people are believed to have died from carbon monoxide poisoning during the storm as they tried to keep warm, while nearly two dozen others died when the medical devices they relied on stopped working.
Shell’s US operations are based in Texas, a vital state for the country’s oil industry.
The company said that adjusted earnings in its upstream unit – the part of the business which finds, extracts or produces oil and gas – are expected to be adversely affected by 40 million dollars (£29 million) due to the storm.
Its oil refinery in Deer Park, Texas, normally processes more than 300,000 barrels per day. However Shell and its partner, Pemex, were forced to close the plant “due to unprecedented weather” in the middle of February.
The closure will lead to an 80 million dollar (£58 million) hit to its adjusted earnings in the oil products unit.
Meanwhile, the company’s chemicals unit expects to take a 60 million dollar (£44 million) hit from the storm.