COLUMN-Insider trading rules should apply to oil outages: Kemp

Fri Oct 26, 2012 6:57am EDT
Email This Article |
Share This Article
  • Facebook
  • LinkedIn
  • Twitter
| Print This Article | Single Page
[-] Text [+]

By John Kemp

LONDON Oct 26 (Reuters) - Severe maintenance overruns at Nexen's Buzzard oilfield have highlighted the need for a better regime for disclosing price sensitive information about oil output and problems in the North Sea.

Buzzard's delays have slashed output of the benchmark-setting Forties crude stream in October - contributing to a significant short-term rise in the price of crude and refined products such as gasoline for customers across the EU.

The EU should set aside objections from the industry and use the current review of the market abuse rules to mandate disclosure, and ban trading on information about supply disruptions, until the information has been disclosed to the market as a whole.

Buzzard's maintenance was supposed to be completed by October 10, according to verbal guidance issued to stakeholders. But in its third quarter earnings release, issued on Thursday, the company admitted the project had taken longer than expected and the platform is only now being restarted, some 20 days or more late.

"We are in the process of restarting the platform and expect production to ramp up in the next week to 10 days," the company said.

Even now it has not explained the reasons for the overrun. The earnings release blandly notes that "the scheduled turnaround ... was completed with no significant issues discovered, though it did take longer than expected."

Buzzard's problems have been a major contributory factor to the chaos in the Forties loading programme. All 16 cargoes scheduled to load in October have been deferred, one November cargo has been cancelled and two more have been delayed.   Continued...