Loss of Storage Vessel Cuts Britain’s Oil Production

Temporary loss of a huge oil-storage vessel damaged in a North Sea storm could halt production for months at three oil fields in the region, a Shell UK official said.

At current prices of $15 per 42-gallon barrel, the estimated combined daily output of 210,000 barrels is worth $3.15 million. It represents 10% to 12% of Britain’s North Sea production.

The modified tanker contained 100,000 tons of oil when it broke free in high seas and 60 m.p.h. winds Saturday and drifted for five hours, carrying its 34 crew members 13 miles and threatening neighboring platforms. Two tugboats brought the floating storage tank under control after five hours.

The vessel, nearly a quarter-mile long, provided storage for 200,000 tons of crude. It acted as a central loading point for the output of the Fulmar and Auk fields, operated by Shell, and the Clyde field, operated by Britoil, now part of British Petroleum Co.

A Shell spokesman, speaking on condition of anonymity, said a remote-controlled video-equipped submarine inspected the vessel’s damaged loading system Sunday. He predicted that production will be halted for “weeks, possibly months.”

Running Below Potential

The rigs must stop pumping because they have no place to store their oil.

North Sea oil production was already running 10% below potential because of the loss caused by the Piper Alpha disaster. That oil rig, owned by Occidental Petroleum Corp., caught fire and exploded July 6, killing 167 men. The rig was destroyed and the wells plugged with cement.

Shell said Saturday’s shutdown will have an effect on the company but gave no details.