Royal Dutch Shell plc (ADR) (NYSE:RDS.A) Halts Operations In Netherlands Refinery Due To Inferno

Royal Dutch Shell plc (ADR) (NYSE:RDS.A) has grounded all operations in its Netherlands refinery due to a fire incident.

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Shell resorted to shutting down most of the units at the Rotterdam refinery in the Netherlands after a fire erupted at a high-voltage switch station. Thijs van Velzen, a spokesman for the firm revealed that the fire incident took place on Saturday evening but the workers managed to extinguish it by Sunday morning. Further good news revealed that no one was injured during the entire incident. The fire was a huge blow for the firm considering that the Pernis refinery in Rotterdam is the largest refinery in Europe.

The refinery is one of Shell’s major assets

The Rotterdam refinery produces about 400,000 barrels on a daily basis. Shutting down such capacity even for a day could significantly affect supply. Shutting down the facility allowed the excess gasses to be burnt in a process called flaring. The result was large flames seen in the sky on Sunday night. So far there have been no statements on just how much damage the incident caused financially, though Van Velzen stated that investigation to determine the cause is still ongoing.

“Shell is in the process of shutting down all the units at the site,” stated Van Velzen.

The spokesman pointed out that the refinery units are interconnected and some of them are now out of service as a result of the fire. Van Velzen also noted that it will take several hours and even days to restore operations. This means the company could take up huge losses from the lost hours of production within that timeframe as well as the cost of the repairs.

There have been rumors that the fire was ignited by a short circuit though Shell has not confirmed the claims. However, it is not all bad news. The regional security authority announced that the smoke from the fire did not contain any toxic material.

Shell stock closed the latest trading session on Friday at $55.74 after a 0.83 percent gain compared to the value of the stock during the previous close.

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