* Says repairs to take 6-8 weeks * Sees deferred production of 0.5-0.6 mln barrels in Q3 * Sees 2010 production at lower end of 283-288 bcfe * To complete clean-up efforts in the next “several” days
* Shares down 3 pct (Recasts; adds analyst, company comments, share movement)
By Thyagaraju Adinarayan
BANGALORE, July 12 (Reuters) - Oil and gas company Newfield Exploration Co (NFX.N) said it shut down a damaged Malaysian oil pipeline, and cut its full-year production outlook to the lower end of its prior view.
The company said production from the field was shut and the leak has been isolated and expects deferred production of 0.5 million-0.6 million barrels in the third quarter.
“It is a pretty small piece of overall production ... Malaysia rates about 8 percent of our overall production,” Vice President Stephen Campbell told Reuters.
In a statement on Monday, the company said it now expects 2010 production to be at the lower end of the 283 billion cubic feet equivalent (bcfe)-to-288 bcfe range.
The pipeline was damaged by an unidentified marine vessel unrelated to Newfield’s operations, the company said.
Campbell said the leak will not have any impact on the shorelines, adding that the company had been actively working to remediate the leak on the surface.
“The clean-up efforts will be done in next several days. There was no significant amount of oil on the surface.”
East Belumut is located about 160 miles offshore Peninsular Malaysia, in 240 feet of water and was producing about 20,000 barrels of oil per day gross prior to shut-in, the company said.
Jefferies & Co analyst Subash Chandra said the production shortfall was a 1 percent reduction in 2010 volumes and not material.
He said damage to the pipeline damage could result in about $30 million to $35 million in lower cash flows.
Newfield estimates that repairs to the oil pipeline connecting the East Belumut platform on PM 323 to the Tinggi platform will take 6 to 8 weeks to complete and return to production.
Malaysian state oil company Petronas had said on Friday it shut down pipelines at an oil platform after discovering an oil sheen near facilities it shared with Newfield and the Malaysian unit of Exxon Mobil (XOM.N). [ID:nSGE669EL1] Shares of Houston-based Newfield were down 3 percent at $50.35 Monday late morning on the New York Stock Exchange. (Reporting by Thyagaraju Adinarayan in Bangalore; Editing by Jarshad Kakkrakandy; Unnikrishnan Nair)