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UPDATE 2-Statoil working on partial restart of Snorre B field in North Sea
May 21, 2014 / 8:46 AM / 3 years ago

UPDATE 2-Statoil working on partial restart of Snorre B field in North Sea

* Incident ups risk on Statoil's 2014 earnings -analyst

* Unclear how severe the situation is -safety watchdog

* Snorre is Norway's 4th biggest oilfield (Adds potential restart of some production)

By Gwladys Fouche

OSLO, May 21 (Reuters) - Norwegian oil firm Statoil is working to resume partial production at its Snorre B platform in the North Sea although full production will not restart until a probe is conducted as to why the ground shifted under a seabed installation.

The incident, which has shut about half of the total Snorre field's production, or around 48,000 barrels of oil per day, began Saturday when the company evacuated about a quarter of the platform's personnel after detecting a soil shift under a drilling template.

The Snorre field, which has two platforms, is Norway's fourth-biggest oilfield and accounts for 1.5 percent of Statoil's total output.

Production was first shut on Saturday, then halted again on Monday when more problems were discovered during a restart attempt.

"Statoil has decided to keep production shut down until the necessary investigations have been carried out," the company said in a statement.

The Norwegian oil safety watchdog said it was monitoring the situation closely. It had classified the incident as a grade 4 on its safety scale, on which 5 is the most serious.

"We don't yet know the cause of this situation. Until we get that information, it is hard to say how severe it is," said Oeyvind Midttun, a spokesman for the Petroleum Safety Authority Norway.

"Statoil tells us the situation is stable, but not clear. There is so far no indication that there are any hydrocarbon leaks," he said.

Statoil said it was working to resume some production at Snorre B. There are four templates on the seabed. One template is affected by the shift on the seabed, while the three others were shut due to a separate incident, a power failure that occurred on Sunday.

"We are now working hard on getting the three templates back in production," Statoil spokesman Oerjan Heradstveit told Reuters. It was not yet known when the production at those templates could resume, he said.

An analyst said the incident was negative for the company's 2014 earnings outlook.

"The shut in increases the risk to our 2014 EPS (earnings per share) estimate of NOK 17.0," Teodor Sveen Nilsen at Swedbank wrote in a note to clients.

Statoil's share of production from the field was 32,000 barrels per day in the first quarter of this year, Nilsen said. Production from Snorre B accounts for about half of the total production of the field's, Statoil has said.

The firm said it had not detected any leaks of oil and gas from the reservoir into a pit formed under the template.

It had pumped brine - water with heavier sediments - into the well to prevent the possibility of oil and gas leaking into the pit.

Snorre produced 88,000 barrels of oil per day in 2013. Statoil has said the Snorre A platform was operating normally.

Statoil is the operator of the field and has a stake of 33.3 percent.

Its partners include state-owned Petoro with 30 percent, ExxonMobil with 17.76 percent stake, Idemitsu Petroleum with 9.6 percent, RWE with 8.28 percent and Core Energy with 1.04 percent. (Editing by William Hardy, editing by David Evans)

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