Energy
Oil Sheen in Gulf of Mexico Knocks Shell Stock (RDS-A, RDS-B, BP, TOT)
Published:
An oil sheen has appeared in the Gulf of Mexico near an area where Royal Dutch Shell plc (NYSE: RDS-A) (NYSE: RDS-B) has operations. The sheen is about 1 mile wide and 10 miles long. According to Shell’s press release:
At this time, the source of this sheen is unknown, and Shell’s priority is to respond proactively, safely, and in close coordination with regulatory agencies.
The company also said that there is no “current indication that the sheen originates” from either its Mars or its Ursa operations.
The mere appearance of the sheen calls to mind the experience of BP plc (NYSE: BP) two years ago when the Deepwater Horizon exploded, killing eleven workers and dumping more than 5 million barrels of crude into the Gulf. France’s Total SA (NYSE: TOT) is currently combatting a natural gas leak from a well in its North Sea Elgin field.
The Wall Street Journal cites one analyst who said, “There is a nervousness over the whole spill situation, following Deepwater Horizon and Total in the North Sea, so people are going to sell first, ask questions later.” That sounds about right.
Shell’s shares are down about -4% in the premarket, at $65.05 in a 5-week range of $57.97-$77.97.
Paul Ausick
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