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Shale Profits Remain Elusive

Shale Profits Remain Elusive

Despite higher oil prices, U.S…

Europe’s Largest Oil Refinery Shuttered For Weeks

Refinery

A Royal Dutch Shell refinery in Rotterdam will remain closed until mid-August after a fire at the facility’s electricity stations caused it to shut down over the weekend, according to the owner company.

The Pernis refinery will become functional again “at the earliest in the second half of August,” according to a recent statement.

Pernis refines 400,000 barrels per day of oil, making it Europe’s largest refinery. The financial impact of the temporary closure is sure to be sizable, though Shell has not released any figures as of yet.

“We are doing everything we can to minimize impact to our customers,” the company said. Earlier, a Shell spokesperson told AFP that all units of the refinery had to be shut down because they are all interconnected. The effects of the outage spread to other areas soon after the short circuit.

European diesel prices surged following Shell’s announcement of the closure, according to Bloomberg. French Total’s Leuna refinery in Germany has also seen limited output in recent weeks, leaving stations in the Leipzig area without fuel. In Greece, last week Hellenic Petroleum declared force majeure on its 100,000-bpd Elefsina refinery, suspending diesel exports.

Diesel in storage fell counter-seasonally in July as well, meaning the Pernis incident accelerates the “pace of the tightening” of the European diesel market, Petromatrix GmbH Managing Director Olivier Jakob told Bloomberg over the phone.

Last week, Shell announced a triple increase in net earnings attributable to shareholders for the second quarter of the year, to $3.6 billion. The results were attributed to higher oil prices that pushed up oil product prices as well, and to cost efficiency improvements. Downstream earnings improved by 39 percent to $2.5 billion, but the bulk of this improvement came from chemicals production rather than fuels.

By Zainab Calcuttawala for Oilprice.com

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