Shell Says No Signs Of Leak in Its US Gulf Operations

Shell: Gulf of Mexico Sheen, Taking Proactive Measures

HOUSTON - Royal Dutch Shell PLC said Thursday that a sheen floating in the central U.S. Gulf of Mexico is dissipating and it suggested the material originated naturally from the seafloor and not from the oil-and-gas giant's nearby platforms.

Shell said it was "very confident" that the sheen didn't stem from the company's operations at two oil platforms near where it was sited Wednesday. The company's latest update instead focused on the possibility of the material seeping naturally from the seafloor.

"The Gulf of Mexico has a long history of natural occurring seeps, which can on occasion produce sheens," Shell spokeswoman Kelly op de Weegh said in an emailed statement.

Shell said earlier Thursday that an inspection of Shell assets showed operations in the area were normal, with no signs of leaks. The comments seemed to ease investors' concerns that the Anglo-Dutch company was mired in a major environmental catastrophe; Shell shares in the U.S., which opened 1.5% below their Wednesday close, rose 0.5% to $68.07 in midmorning trading before falling back to $67.86 at the close.

The U.S. Bureau of Safety and Environmental Enforcement, or BSEE, said that its personnel spotted an oil sheen in the U.S. Gulf on Wednesday at 12:30 p.m. CDT, and notified Shell, which owns the closest facilities to the sheen, the Mars and Ursa platforms. The agency is part of the U.S. Interior Department and regulates offshore oil-and-gas operations.

BSEE said Thursday afternoon that the sheen didn't appear to be coming from wells in the vicinity.

Shell said in a statement Wednesday that a 10-square mile layer of an unknown substance was floating between Mars and Ursa, which are some of the largest oil- and gas-producing facilities in the U.S. Gulf. They are located about 130 miles southeast of New Orleans. In September 2005, Mars was heavily damaged by hurricane Katrina, but restarted service in mid-2006.

Shell said it confirmed that there are "no well-control issues" associated with its drilling operations in the area. The company said it is still investigating the sheen, which is estimated to measure the equivalent of six barrels of oil, and will leave an oil-response vessel it dispatched Wednesday in the area to attend to what it called an "orphan sheen."

Shell has also deployed remote-operating vehicles to inspect local infrastructure and the seafloor, including permanently plugged wells in the surrounding area and a known natural seafloor seep located near the sheen, the BSEE said.

The BSEE, which sent an airplane early Thursday to monitor the sheen, ordered operators of nearby pipelines to begin surveying their lines for potential leaks, it said.

The U.S. Coast Guard said it is conducting a flight over the area and expects to release results of the observation.

Nearly two years ago, a Transocean Ltd. rig working for BP PLC in the U.S. Gulf blew up after it lost control of the deepwater well it was drilling, killing 11 and unleashing the worst offshore oil spill in U.S. history. The unprecedented incident resulted in an overhaul of offshore-drilling regulations and increased vigilance about oil spills in the region.


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