After having rallied to 16…
In a somewhat surprising move,…
In the wake of a massive inferno at its Singapore Pulau Bukom refinery, which processes 500,000 barrels a day, Shell declared force majeure, allowing it to void some of its contractual obligations to its customers.
Shell Companies in Singapore chairman Lee Tzu Yang issued a statement noting, “We confirm that force majeure has been declared on some of our customers. We continue to be in discussions with our customers to address their supply of product needs and to minimize any potential impact to them.”
Analysts believe that the severity of the blaze could force Shell to take its Pulau Bukom refinery offline for up to a month. Pervin and Gertz managing consultant Victor Shum remarked, “If it were to be shut down that long, losses would be in excess of $60 million for Shell. Now that the whole plant has been shut down, even if somebody decides to resume operations, it will take days, if not longer, to get back to normal operating rates. The investigation by both Shell and Singapore may delay the resumption of operations.”
The regional price of oil products has risen since the fire, with diesel prices spiking 10 percent in the immediate aftermath of the conflagration, The Jakarta Globe reported.
The offshore Pulau Bukom refinery exports 90 percent of its products throughout the Asia-Pacific region.
By. Joao Peixe, Deputy Editor OilPrice.com
Joao is a writer for Oilprice.com