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Three North Sea Forties oil cargoes dropped as Buzzard field shut

Published 27/11/2018, 17:21
© Reuters.  Three North Sea Forties oil cargoes dropped as Buzzard field shut
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By Alex Lawler and Ron Bousso

LONDON (Reuters) - The shutdown of Britain's largest oilfield for repairs is reducing supply of a North Sea crude that helps to set global prices, as trade sources said on Tuesday three cargoes due to load in December had been cancelled.

The Buzzard oilfield, which pumps about 150,000 barrels per day and is the largest contributor to the Forties crude stream, has closed temporarily after the discovery of pipe corrosion. A smaller field linked to Forties, Total's Elgin-Franklin, is also shut for maintenance.

A prolonged drop in Forties output could boost fuel prices for consumers around the world as Forties is one of the crude oils that underpin Brent, a benchmark used for pricing oil deals in Europe, the Middle East, Africa and parts of Asia.

Trade sources said three 600,000-barrel Forties cargoes loading in December had been dropped by their owners due to lower-than-expected production. This will reduce next month's loadings to 16 cargoes.

"I believe that with poor production they were given the option to defer or drop the cargoes, and they took the drop option," one of the sources said, referring to two of the cancelled shipments.

A spokesman for Nexen, which operates Buzzard, gave no timeframe for how long repairs would take. The field had been expected to restart last week.

A source at one of the companies with a stake in Buzzard, who declined to be identified by name, said the repair work was "manageable" and unlikely to take weeks.

A second source with knowledge of the issue said the fix was unlikely to be rapid as winter weather in the North Sea would add to the time taken.

"It's not going to be back tomorrow," another source said. "The weather complicates things."

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