BP PLC said Wednesday that oil production at its Prudhoe Bay oilfield in Alaska, already running at half capacity due to pipeline corrosion, has been cut by 90,000 barrels per day (bpd) for several days due to a technical fault.
A company spokesman said output at the biggest oilfield in the United States had been reduced to 110,000 bpd after a natural gas compressor in Gathering Center 2 failed.
“We anticipate that fixing the compressor will require several days,” said BP spokesman Daren Beaudo.
Prudhoe Bay had previously been pumping about 200,000 bpd, around half its normal output, after serious corrosion in a pipeline led BP to shut down the eastern half of the field earlier this month.
The spokesman said no one was hurt and no oil was spilled in the latest incident, which has added to worries over an oil market strained by reduced Nigerian supply and fearful of potential disruptions in the Middle East.
First we’re losing all of the production, then the government clears the way to reopen the western half of the field, then this. My sense is that the market will probably have to figure on capricious supply from Prudhoe Bay for the foreseeable future, and build in some cushion for further uncertainty regarding what was the source of 8% of total U.S. output.
The uncertainty about Prudhoe Bay was offset today, however, by the release of six foreign oil workers that had been kidnapped by Nigerian militants, as well as a perceived drop in U.S. gasoline demand:
The six Nigerian hostages were freed late yesterday in Port Harcourt, the country’s main oil port. Unrest in the Niger delta region this year has cut supplies from Nigeria, Africa’s biggest oil producer, by about a quarter.
Yesterday, the U.S. Energy Department said gasoline supplies rose by 402,000 barrels last week, instead of falling by about 2 million barrels as analysts had forecast. Demand in the U.S., the world’s biggest oil user, usually eases after Labor Day in early September, which marks the end of summer vacations.
Oil slipped today “following yesterday’s losses amid bearish inventories data in the U.S. with a surprise increase in gasoline” stockpiles, said Michael Davies, an analyst at Sucden (U.K.) Ltd. in London.
Crude oil for October delivery was at $71.72 a barrel, down 4 cents, on the New York Mercantile Exchange at 12:47 a.m. in London. The contract fell 1.2 percent yesterday. Brent for October settlement was up 8 cents to $72.10 a barrel on the ICE Futures exchange in London.
Nigerian kidnappers freed foreigners taken hostage Aug. 13 from a bar in the Nigerian city of Port Harcourt, according to the U.S. consulate in Lagos. The hostages, all male, included two from Britain and one each from German, Ireland, Poland and the U.S.
More than 45 oil workers have been kidnapped this year in Nigeria, with at least 17 taken in August alone in six separate incidents. Most of the abductions this month took place in Port Harcourt, a city in the Niger delta where Royal Dutch Shell Plc’s Nigerian venture has its headquarters.
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