ANGRY oil traders branded chronic output disruption at Britain’s biggest oilfield, Buzzard, as “worse than Nigeria” yesterday after production problems flared up again.
Buzzard is the biggest of the North Sea fields that contribute to the Forties crude blend, which underpins the key Brent benchmark price.
The latest production glitch at the field, owned by Canadian oil giant Nexen, struck on Sunday. That came only days after the flow of crude had restarted on 3 November, following an earlier extended, two-month shutdown.
One trade source said yesterday: “It was back up to full output but [then]tripped… on Sunday, and production is still shut down.”
One frustrated trader commented: “It is literally unbelievable. It is easy to say from the sidelines, but still, this is worse than Nigeria.”
Output in Nigeria, Africa’s top exporter, is often disrupted and has been curbed by oil theft and flooding in recent weeks. Comparisons of North Sea disruption with the African nation’s volatility is virtually unprecedented.
A Nexen spokesman in Calgary, Alberta, confirmed Buzzard suffered a power outage on Sunday, halting production, but was due to come back onstream yesterday.
“We’re back on line right now and oil exports are expected later today,” spokeswoman Patti Lewis said.
The series of delays in Buzzard’s restart has disrupted shipments of Forties crude, triggering an increase in the premium in the price of Brent oil for immediate delivery. One analyst commented: “That is undoubtedly behind the frustration the oil dealers are expressing.”
Buzzard shut on 4 September for planned maintenance that traders initially expected to take 28 days. But that deadline was pushed back during October. Buzzard was also reported to have suffered four outages earlier this year that either shut down or slowed output.
Traders said yesterday that a loss of Buzzard output for even a few days can have a significant impact on Forties loadings since the field pumps around 200,000 barrels per day (bpd), enough to fill a Forties cargo every three days.
Oil industry experts said getting oil pumping again from disrupted North Sea installations can also take longer than expected due to bad weather and unexpected engineering and technical issues.
Apart from the new problems besetting Buzzard production, the crude oil price was also helped yesterday by signs that Chinese oil demand grew last month, although Brent crude fell back from early prices above £110 a barrel.
Another factor, said analysts, was concern about the looming US “financial cliff” early in 2013 when a series of American tax rises and government spending cuts are due to kick in.
Acquired by Nexen in 2004, Buzzard is the largest North Sea discovery in the past two decades. The facility is about 60 miles north-east of Aberdeen in over 300 feet of water.
Oil is transported through the Forties pipeline to the Kinniel terminal in Grangemouth. Natural gas is exported through the Frigg pipeline system to the St Fergus gas terminal in North-east Scotland.
The field, which began production in early 2007, is expected to produce about 70,000 to 80,000 barrels of oil equivalent per day (boepd) to Nexen this year,
The United States will overtake Saudi Arabia and Russia as the world’s top oil producer by 2017, the west’s energy agency said yesterday.