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Tuesday 12 December 2017

Shell working to mitigate effects of Hurricane Harvey

Five Houstonbased Trinidad and Tobago (TT) nationals who work for Royal Dutch Shell (Shell) are “all safe” following the passage of Hurricane Harvey in late August.

They are among the nearly 10,000 employees in the United States (US) who are working to get operations back to normal.

This was the September 5 response of Shell Trinidad Limited to questions posed by Business Day about the impact of Harvey on its operations.

“We have all seen the devastating effects that Category 4 Hurricane Harvey had on the city of Houston. Our employees and operations in Houston have also been impacted, in fact, nearly half of our 20,000 employees in the US are now dealing with Harvey-related impacts in varying levels of severity.” “This number also includes five Houstonbased Trinidad and Tobago nationals who are all safe. The safety of our employees remains our number one priority and we have activated several support programmes for impacted staff, including temporary living supplement and nonurgent medical guidance and support.” Shell Trinidad said its US office has made donations to several agencies, including a US $1 million donation to the American Red Cross and a $250,000 donation to the United Way of the Texas Gulf Coast.

The company has also activated the Shell Disaster Relief Fund (DRF) which is a stand-alone programme through which Shell employees and pensioners can make credit card donations to organisations supporting disaster relief efforts and have those donations matched by Shell on a 2:1 ratio.

Hurricane Harvey may have been downgraded to a tropical storm but by the time the slow moving, powerful weather system made landfall, refineries owned by Shell and ExxonMobil; among others, had been shut down.

According to S&P Global Platts, this removed 2.2 million barrels per day of capacity.

In addition, oil production was suspended at wells in the Eagle Ford shales and at offshore platforms.

Getting refineries, platforms and wells back to full operating capacity takes time.

Business Day asked if this and damage caused by Harvey might have an impact on operations in Trinidad and Tobago (TT).

Vice president of Shell and country chair of Shell Trinidad Limited, Derek Hudson, said, “While our TT operations are not directly impacted, our Houston business is an important part of our global portfolio and we are in contact with our colleagues to offer moral, emotional and other support to them.” “As a company, we have a lot of experience with gulf coast weather events and well-grooved processes in place to manage the phased approach to bringing our business fully back online. Caring for our people negatively impacted by Hurricane Harvey remains our top priority,” Hudson assured.

Regarding the expected time frame in which its Houston operations are expected to return to normal, Shell said, “The safety of our people and the environment are top concerns and we are taking a safe, systematic, phased approach to bring the facility back online.” As such, the company’s Houston offices were expected to open on Tuesday (September 5) for essential staff.” In terms of employees whose homes may have been damaged or destroyed during Harvey, Shell told Business Day that because its employees, “like all Houstonians, were impacted differently, this is being managed according to individual circumstances.” Asked if it would have to bear the cost of these home repairs, whether in part or full, Shell said it is working with impacted employees to “facilitate their return to normalcy as soon as possible.” Shell has therefore established a support system for its employees, which includes access to interest-free loans “to assist in the recovery process.” While travel to and from Houston was delayed by Harvey’s passage, Shell said it has no reports of any employees being stuck in either Houston or Trinidad at that time.

Asked if it is considering transferring staff to TT until operations in Houston are back to normal, Shell told Business Day this would not be necessary.

“Our Houston office is efficiently managing this process. The safety of our employees is our number one priority and many who are able to, have been working remotely.” Shell then reiterated that its Houston offices would re-open this past Tuesday “with essential staff.” The company explained that “superstars” can vary from one Shell business to another, depending on an individual’s role and responsibilities.

Business Day also asked if Shell is importing oil from its other refineries to make up for the shortfall out of Houston while its Deer Park Refinery is closed.

Emphasising the importance of safety once again, Shell replied, “Our goal is to ensure a safe, reliable supply of Shell-branded gasoline in every market we serve.” “In the aftermath of Harvey, we will work in close co-ordination with our Shell-branded wholesalers to tackle any supply and logistical challenges that may arise,” Shell stated.

Business Day also spoke to CEO of the Energy Chamber of TT, Dr Thackwray “Dax” Driver, about Harvey’s impact on the energy sector.

Driver noted that “Houston is the global capital of the oil and gas industry. Most of the major oil and gas companies have offices in Houston, as do the major international service companies and engineering firms.” Some people have wondered if the disaster in Houston would lead to a boost in the price of West Texas Intermediate (WTI), also known as Texas light sweet; a grade of crude oil used as a benchmark in oil pricing.

This is not likely to happen, however, due to a drop in demand for oil.

Asked to explain this for those not familiar with the situation, Driver said, “Refineries buy crude oil and refine it to make products, such as gasoline, diesel and jet fuel, which is then sold to consumers. With many of the major US oil refineries being offline, due to the storm and flooding, the demand for crude oil will obviously decrease, hence the downward pressure on US crude oil prices (WTI being the benchmark price).” “Because the refineries are offline, the supply of gasoline and diesel to consumers will decrease, as less is being produced, hence the sharp increase in prices for petroleum products.”


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