April 25, 2008 / 7:48 PM / 10 years ago

Buzzard field hit by North Sea pipeline outage

CALGARY, Alberta (Reuters) - The 200,000 barrel a day Buzzard oil field in the North Sea is among dozens that must stop pumping as a key pipeline powers down due to a strike planned this weekend at a Scottish refinery, Nexen Inc NXY.TO, the field’s operator, said on Friday.

“As they go through those procedures, then we’ll get notice to do similar things. It just kind of piggybacks off that,” Nexen spokesman Mike Harris said. “Then we wait until they tell us we can bring it back up again.”

BP Plc (BP.L), which runs the Forties pipeline that supplies about half of Britain’s crude, started shutdown procedures on Friday. The Grangemouth refinery, about 34 km (21 miles) northwest of Edinburgh and the target of the labor dispute, supplies electricity to the pipeline.

The situation was a factor in a jump of more than $2 in world oil prices on Friday to $118.52 a barrel.

Nexen is one of numerous Canadian energy companies with operations in the North Sea. Others with production affected by shutdown of the 700,000 bpd pipeline include Talisman Energy Inc TLM.TO, Canadian Natural Resources Ltd (CNQ.TO) and Oilexco Inc OIL.TO

The Forties pipeline system ships crude from about 70 oil fields. The strike at the Ineos-operated refinery, due to start Sunday, has raised fears of fuel shortages in Scotland and northern England.

Harris said it will take time for the Buzzard platform to return to normal rates when the pipeline starts running again.

“You don’t flip it on and get straight to big rates again. It probably takes up to two days to ramp up to where we were before,” he said.

Talisman said the outage will affect 20,000 barrels of oil a day, or 22 percent of its U.K. output. Production from the company’s Montrose/Arbroath, Buchan/Hannay and Enoch fields is shipped through Forties.

“My understanding is that they’re starting the shutdown procedures tonight, April 25,” Talisman’s Teri Keyser said.

The outage will hit Canadian Natural’s Tiffany, Thelma and Toni fields, which normally pump up to 12,000 barrels a day, or 25 percent of is North Sea output, it said.

For its part, Oilexco said 21,500 barrels a day of oil output at its Brenda/Nicol and Balmoral fields is affected.

Nexen has a 43.2 percent stake in Buzzard. Its partners are Petro-Canada PCA.TO with 29.9 percent, BG Group BG.L with 21.7 percent and Edinburgh Oil & Gas with 5.2 percent.

Editing by Rob Wilson

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