LONDON, July 17 Royal Dutch/Shell is
shutting down production at its Auger platform in the Gulf of
Mexico while it hooks up its new Cardamom oilfield to the
two-decade old platform's infrastructure.
A Shell spokeswoman said on Wednesday the company began work
this week on the shut-in which will cut off 55,000 barrels of
oil equivalent per day of production. A statement said the Auger
platform "should restart in the fourth quarter of 2013."
An Auger pipeline feeds the Bonito sour crude stream,
according to the Shell web site.
Crude traders and brokers said the announcement of the shut
down explained the stronger price for Bonito on Tuesday, when
August barrels for the cash crude grade traded at $4.45 and
$4.60 a barrel over the benchmark U.S. crude futures.
That was well above sellers' offers seen on Monday at $2.90
over the benchmark.
Eugene Island crude , another Gulf Coast sour grade,
had sellers' offers pegged at $4.25 a barrel over the futures
benchmark on Tuesday, after trading at $2.70 over on Monday.
Offers from sellers for Bonito were pegged stronger at $5.50
over the futures benchmark on Wednesday and Eugene Island traded
at $5.25 a barrel.
Cardamon, 100 percent owned by Shell, will start producing
in 2014 and will deliver at a peak rate of 50,000 boepd, adding
to Auger's 55,000, of which Shell owns 30,000.
"Cardamom is a great example of using existing
infrastructure to increase oil and gas production in a less
capital intensive way," Shell executive president John Hollowell
Shell, like its peers, is struggling to replace reserves and
boost production, and faces a squeeze on earnings as the huge
cost of building oil infrastructure rises.