Tags: Shell | Shares | Spill | oil

Shell Shares Fall on Fears of Gulf of Mexico Spill

Thursday, 12 April 2012 10:22 AM

Shares in Royal Dutch Shell fell on Thursday as the company stepped up efforts to monitor an oil spill in the Gulf of Mexico, in a market still jittery after BP's 2010 Deepwater Horizon disaster.

Shell has sent a spill response vessel to the area and is seeking aircraft to monitor an oil sheen — a layer of oil floating on the sea — near its platforms in the central Gulf of Mexico, it said in a statement on Thursday.

Shell shares fell 5 percent in London, while the U.S.-listed shares opened lower.

News of the sheen comes almost exactly two years after BP's deep sea Macondo well disaster that saw nearly 5 million barrels of oil escaping into the Gulf of Mexico, rocking BP's reputation.

"While the extent of the sheen, reported at 1 mile by 10 mile, is large and will be a concern, the sheen is light and could result from volume of only a couple of barrels," RBC Capital Markets analyst Peter Hutton said. "First light will provide opportunity to assess whether there has been any increase in the visible sheen."

Shell said it had reported the sheen, between its Mars and Ursa projects, to the National Response Center, which is run by the Coast Guard and keeps up with marine oil spills, pipeline leaks and other incidents of pollution.

Europe's largest oil company by market capitalization said the source of the one-mile by 10-mile sheen was unknown, but added that there was had no indication that it had originated from wells in either the Mars or Ursa projects.

A Shell spokeswoman told Reuters it would issue a further statement once the sun rose in the area.

Shell owns a 71.5 percent interest in the Mars project and a 45.4 percent stake in the Ursa project, and is the operator of both projects. BP owns a 28.5 percent stake in the Mars project and a 22.7 percent interest in the Ursa.

Shares in BP — which was facing environmental activists still angry about its 2010 spill at its annual shareholders' meeting in London on Thursday — were down 2.2 percent.

"Given the location of the sheen, we expect sensitivities to be high," Hutton said, adding that he expected a swift response from the company.

Shell said it had activated the Louisiana Responder, a Marine Spill Response Corp. vessel, and requested flights to monitor the sheen closely.

Marine Spill Response is a non-profit organization created in 1990 by the oil and shipping industries to enable members to fulfill requirements of the U.S. Oil Pollution Act of 1990.

© 2019 Thomson/Reuters. All rights reserved.

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Thursday, 12 April 2012 10:22 AM
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