Shell Argentina declares service station force majeure

BUENOS AIRES (MarketWatch) — The Argentine unit of Royal Dutch Shell plans to send letters Thursday to its service stations declaring a force majeure, citing a government order to shut down its refinery, Shell Argentina President Juan Jose Aranguren said.

Shell Argentina began shutting down its Doc Sud refinery in Buenos Aires after receiving an order from the government’s Environmental Ministry on Wednesday night. “We have a situation of force majeure, and we consider it out of our control,” Aranguren told reporters during a meeting at Shell Argentina headquarters.


The shutdown order is the latest in a string of clashes since 2005 between Shell and government officials, and it comes amid reports that Exxon Mobil Corp. (XOM) wants to sell its Argentine unit, Esso, whose refinery provides about 12% of the nation’s gasoline and diesel. Asked if Shell wants out, too, Aranguren said the company will continue to operate in Argentina.

The refinery shutdown will take five days, with another five days needed to bring the refinery back up to full production if the order were to be reversed or legally blocked, he said.
By Thursday, the inflow of oil to Doc Sud had dropped from the normal 15,000 cubic meters a day, or roughly 95,000 barrels a day, to 10,000 cubic meters a day, Aranguren said.

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