China keen to fix Britain's broken benchmark oilfield

Tue Mar 12, 2013 8:02am EDT
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* CNOOC expects higher output from UK North Sea assets

* At least six Buzzard shutdowns in 2012, one so far in 2013

* Supply losses affect global prices via Brent benchmark

By Alex Lawler and Claire Milhench

LONDON, March 12 (Reuters) - China's state oil company is prioritising a fix for Britain's biggest oilfield, the accident-prone Buzzard, which plays a part in setting global oil prices.

CNOOC has taken a controlling stake in the North Sea field central to the price of benchmark Brent crude and which, every time it shuts, can raise costs for some of China's oil imports.

China imports around a third of its oil - over 2 million barrels per day (bpd) including Nigerian and other African crudes - based on Brent prices. An increase in Brent prices by $1 per barrel costs the world's top energy consumer over $60 million a month or $720 million a year in additional oil import spendings.

"We fully expect to increase production from the UK North Sea assets," CNOOC said in a statement to Reuters. "Detailed operational matters have not been finalized, but we are working on specific plans for the North Sea assets."

The Chinese company owns a stake in Buzzard through its $15.1 billion purchase of Canadian oil firm Nexen Inc., operator of the field, which closed last month.   Continued...