Oil rigs are seen in the Gulf of Mexico after Hurricane Ida made landfall in Louisiana, Grand Isle, Louisiana, United States on August 31, 2021. REUTERS / Marco Bello

HOUSTON, Sept.20 (Reuters) – Royal Dutch Shell (RDSa.L), the largest US oil producer in the Gulf of Mexico, said damage to offshore transfer facilities by Hurricane Ida will reduce production early next year, reducing deliveries of a type of crude oil popular with refiners.

Shell was the hardest-hit producer in Ida, which crossed the Gulf of Mexico into the United States last month and pulled 27 million barrels in total from the market. Around 40% of Shell’s production in the offshore region remains offline, and the slow restart has hampered export activity in general.

The Gulf contributes about 16% of US oil production, or 1.8 million barrels per day. Shell is the largest US oil producer in the Gulf of Mexico with eight facilities pumping about 476,000 bpd, according to Rystad.

Shell’s damaged transfer facility, West Delta-143, transports oil and gas from three main fields for processing at onshore terminals. The company had previously suspended numerous contracts to supply crude from the fields, citing losses caused by hurricanes. Read more

Rystad Energy analyst Artem Abramov estimated that the loss of production would wipe out 200,000 to 250,000 barrels per day (bpd) of oil supply from the Gulf of Mexico for several months.

“The disruptions are now impacting total crude available for export from the United States, not just offshore grades,” said Krista Kulh, Houston-based analyst at consultancy Facts Global Energy.

The fields are a key source of Martian acid crude, a quality valued by oil refiners in the United States and Asia. March prices had peaked in a year earlier this month, then eased as other oil supply constraints lifted. Read more

“Based on current prices, there will likely be a lot less crude exported,” Kuhl added.

A Shell spokesperson declined to comment further.

Shell’s Mars and Ursa oil fields, which together supply about 200,000 bpd, would be affected in the first quarter of next year. The third oil field, Olympus, is producing around 100,000 bpd and will be able to resume production in the fourth quarter, Shell said.

Damage to the transfer station pushed the March crude price earlier this month to a more than a year high and threatened exports from September through October.

U.S. crude oil prices fell about $ 1 a barrel on Monday amid concerns over the creditworthiness of a Chinese real estate developer and a U.S. Federal Reserve meeting this week that could see less lenient lending terms .

Reporting by Arathy S Nair in Bengaluru; Editing by Aditya Soni, Nick Macfie and David Gregorio

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