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Shell (SHEL), Pemex May Face Penalty for Texas Plant Fire
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Shell plc (SHEL - Free Report) and Pemex might each be subject to penalties of more than $1 million for a chemical plant fire that occurred in Deer Park, TX, in May, per a lawsuit filed by the state's attorney general.
The lawsuit alleges that while putting out the fire at the Shell chemical factory in the Houston suburb of Deer Park, the companies violated the Texas Clean Air Act, the Texas Water Code and the Texas Solid Waste Act. According to a Shell spokesperson, the company is aware of the allegations but declines to comment on the ongoing or pending litigations, per media reports.
According to Shell, the fire incident at the Deer Park chemical facility north of State Highway 225, on May 5, began in the olefins unit at 3 p.m. The unit contains a chemical compound made up of carbon and hydrogen atoms. Other oil and gas products were also destroyed by the fire.
Per the lawsuit, the facility started unlawfully emitting mass quantities of air contaminants into the environment when it caught fire. The vast quantity of water used to put out the fire caused at least 68.7 million gallons of wastewater to be unlawfully discharged into the Houston Ship Channel. The lawsuit claims that the water discharge continued for more than 20 days. Both Shell and the nearby Deer Park Refining Limited Partnership plant, a joint venture between Shell and PEMEX — Mexico's state-owned oil firm — had polluted the water discharge. Pemex had acquired Shell’s stake in the oil refining partnership in 2022.
According to the filing, each infraction may result in a punishment of up to $25,000 per day for each separate contaminant released in violation of the aforementioned three laws. Per spokesperson Curtis Smith, Shell is investigating the fire and will reveal its findings when complete. The Deer Park site is 70% operational, according to Smith. The olefins unit that was damaged is undergoing repairs and is anticipated to become operational by the fourth quarter of this year, he added.
Zacks Rank & Key Picks
Shell is a group of U.S. and Europe-based big energy multinationals with operations across the world. Currently, it carries a Zack Rank #3 (Hold).
CVR Energy is an independent refiner and marketer of high value transportation fuels. Headquartered in Sugar Land, TX, CVI has 1,470 employees. It is also engaged in nitrogen fertilizer manufacturing business through its interest in CVR Partners, LP.
Evolution Petroleum is an independent energy company. It was formed to acquire and develop oil and gas fields and apply both conventional and specialized technology to accelerate production, particularly in low-permeability reservoirs. EPM has witnessed an upward earnings estimate revision for 2024 in the past 60 days.
Global Partners is a Delaware limited partnership formed by affiliates of the Slifka family. The partnership owns, controls or has access to one of the largest terminal networks of refined petroleum products in New England. GLP is one of the largest wholesale distributors of distillates. It has witnessed an upward earnings estimate revision for 2023 and 2024 in the past 30 days.
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Shell (SHEL), Pemex May Face Penalty for Texas Plant Fire
Shell plc (SHEL - Free Report) and Pemex might each be subject to penalties of more than $1 million for a chemical plant fire that occurred in Deer Park, TX, in May, per a lawsuit filed by the state's attorney general.
The lawsuit alleges that while putting out the fire at the Shell chemical factory in the Houston suburb of Deer Park, the companies violated the Texas Clean Air Act, the Texas Water Code and the Texas Solid Waste Act. According to a Shell spokesperson, the company is aware of the allegations but declines to comment on the ongoing or pending litigations, per media reports.
According to Shell, the fire incident at the Deer Park chemical facility north of State Highway 225, on May 5, began in the olefins unit at 3 p.m. The unit contains a chemical compound made up of carbon and hydrogen atoms. Other oil and gas products were also destroyed by the fire.
Per the lawsuit, the facility started unlawfully emitting mass quantities of air contaminants into the environment when it caught fire. The vast quantity of water used to put out the fire caused at least 68.7 million gallons of wastewater to be unlawfully discharged into the Houston Ship Channel. The lawsuit claims that the water discharge continued for more than 20 days. Both Shell and the nearby Deer Park Refining Limited Partnership plant, a joint venture between Shell and PEMEX — Mexico's state-owned oil firm — had polluted the water discharge. Pemex had acquired Shell’s stake in the oil refining partnership in 2022.
According to the filing, each infraction may result in a punishment of up to $25,000 per day for each separate contaminant released in violation of the aforementioned three laws. Per spokesperson Curtis Smith, Shell is investigating the fire and will reveal its findings when complete. The Deer Park site is 70% operational, according to Smith. The olefins unit that was damaged is undergoing repairs and is anticipated to become operational by the fourth quarter of this year, he added.
Zacks Rank & Key Picks
Shell is a group of U.S. and Europe-based big energy multinationals with operations across the world. Currently, it carries a Zack Rank #3 (Hold).
Some better-ranked stocks in the energy space are CVR Energy Inc. (CVI - Free Report) , Evolution Petroleum Corporation (EPM - Free Report) and Global Partners LP (GLP - Free Report) . While CVI sports a Zacks Rank #1 (Strong Buy), both EPM and GLP carry a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
CVR Energy is an independent refiner and marketer of high value transportation fuels. Headquartered in Sugar Land, TX, CVI has 1,470 employees. It is also engaged in nitrogen fertilizer manufacturing business through its interest in CVR Partners, LP.
Evolution Petroleum is an independent energy company. It was formed to acquire and develop oil and gas fields and apply both conventional and specialized technology to accelerate production, particularly in low-permeability reservoirs. EPM has witnessed an upward earnings estimate revision for 2024 in the past 60 days.
Global Partners is a Delaware limited partnership formed by affiliates of the Slifka family. The partnership owns, controls or has access to one of the largest terminal networks of refined petroleum products in New England. GLP is one of the largest wholesale distributors of distillates. It has witnessed an upward earnings estimate revision for 2023 and 2024 in the past 30 days.