U.S. oil exports have been…
Crude markets closed below the…
Shell has given up its plan to build an oil train unloading terminal near Anacortes, Washington, that would have received 60,000 barrels of crude daily produced in the Bakken shale of North Dakota. The facility would have been an expansion to Shell’s March Point refinery.
According to the company, the project is no longer economical, not least because of the price of Bakken oil, as the refinery’s general manager Shirley Yap said in a statement. But there has also been vocal opposition to the plan from environmental groups and Native American tribes. According to them, it’s this opposition that made Shell change its mind.
Transportation of oil by rail is a sensitive issue, as statistically it has been shown to be more risky than pipelines, and even this method of oil transport is getting more than enough heat from environmentalist groups. Things got more targeted earlier this year, after a 15-car oil train carrying crude for Union Pacific went off the tracks in the Columbia River Gorge, and four cars caught fire.
Shell’s Washington refinery will continue to receive oil via pipeline from Canada and by tankers from Alaska.
Meanwhile, the company is working on exiting its North Sea operations, which, according to UBS, could generate around US$1 billion. The asset sale plan is part of Shell’s efforts to reduce the debt pile accumulated after the US$52-billion takeover of gas major BG Group. At end-June 2016, Shell’s total debt stood at US$79.47 billion, according to its second-quarter financial report..
UBS analysts also suggested that Shell might not stop at partial divestment: “There is of course room to be even more radical, potentially exiting very significant pieces of business that have hitherto been regarded as core to the business,” they said. Shell plans to divest assets worth US$30 billion between this year and 2018.
By Irina Slav for Oilprice.com
More Top Reads From Oilprice.com:
Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.