UPDATE 3-Problem shuts Britain's largest oil field, Buzzard

Mon Apr 23, 2012 2:03pm EDT

Related Topics

* Bearings at gas compressor failed at the newest platform
    * No spill into water
    * Traders say delays on Forties loading

    By Ikuko Kurahone and Jeffrey Jones	
    LONDON/CALGARY, April 23 (Reuters) - Output has been shut
down at the North Sea Buzzard oil field, Britain's largest,
following a problem with a gas compressor on the field' newest
platform over the weekend, operator Nexen said on
Monday.  	
   Traders said the shutdown had been prompted by a small fire
and was likely to cause delays in loading of Forties crude,
which is one of the four streams used for the global dated Brent
price benchmark and has been hit by repeated output problems at
the field since last year.  	
   "Saturday morning there was a bearing failure on one of the
gas compressors on the fourth platform at Buzzard that resulted
in smoke being emitted," Nexen spokeswoman Patti Lewis said.   	
   "Repairs are under way and during this maintenance period,
production has been halted. We expect production will ramp up
over the next 24-48 hours."     	
   She added that Nexen was investigating the cause of the
problem.	
   The company has struggled over the past year with reliability
issues at Buzzard, resulting in frequent downtime.	
    In February, interim Chief Executive Kevin Reinhart
identified fixing Buzzard's problems as one of a handful of
priorities for the company. It is looking to regain favor with
investors after months of production glitches, delays and the
loss of Yemen operations, which culminated in January with the
exit of CEO Marvin Romanow.	
    Another major initiative is boosting production at the Long
Lake oil sands project in Alberta closer to capacity, and Nexen
last week reported some progress. 	
    A spokesman for the UK Health and Safety Executive (HSE)
said: "HSE undertook an initial investigation but decided there
was no need to go offshore to investigate. Instead, HSE is
awaiting the outcome of Nexen's internal investigation before
deciding what action to take."   	
   There was no oil spill into the water.  	
   The oil field's output fell to less than half on Saturday and
was shut down completely on Sunday, traders said. It normally
pumps about 200,000 barrels of crude oil per day.   	
   So far, at least one cargo loading has been delayed since the
shutdown, although Nexen did not confirm that the two events
were directly related. 	
   There was no immediate word from Nexen on whether it had
declared force majeure in response to the outage.  	
   Cargo F0411 will load between May 2-4, according to trade
sources. The loading dates for the cargo have been repeatedly
delayed from the initial schedule to load April 14-16.
   	
   More than half of the April loading Forties cargoes have been
already disrupted by production glitches before the latest
shutdown.   	
   The shutdown limited the fall in ICE Brent futures prices 
compared with U.S. crude futures. ICE Brent crude futures
 were trading 61 cents lower at $118.15 a barrel by 1631
GMT due to renewed concerns over the euro zone economy. U.S.
crude fell $1.09 by the same time. 	
    Nexen shares were up 6 Canadian cents at C$19.15 on the
Toronto Stock Exchange. They have fallen 17 percent in the past
12 months.
FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.