Global Processing

North Sea oil platforms closed after leak detected

January 18, 2013

The Brent pipeline network in the North Sea, which services up to 27 oil fields, has been temporarily closed following the detection of a leak in one on the platforms off Shetland, Cormorant Alpha, which handles around 90,000 barrels per day of crude oil, British newspaper the Independent reports.

According to platform operator TAQA, the installation and the entire pipeline infrastructure have been closed as a precautionary measure. Abu Dhabi-based energy company TAQA took over the platform four years ago and currently produces almost half of the entire crude oil quantity handled by the Cormorant Alpha.

The leak led to the shutdown of eight other major North Sea platforms, and 92 workers have been airlifted off the Cormorant Alpha rig after hydrocarbons were found in one of its four legs, the Aberdeen Press and Journal announced. The newspaper said that 5 to 7 percent of the UK's oil is currently stopped, resulting in a loss of £6 million ($9.6 million) every day. However, the industry body Oil & Gas UK estimated that about 10 percent of the UK's oil production has been cut. The organization stated that it has offered support to TAQA and is awaiting information on how long the shutdown is expected to last.

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Commenting on the incident on BBC Radio Scotland's Good Morning Scotland program, professor Alex Kemp, an oil economist at Aberdeen University, said that the closure was unlikely to have a dramatic effect on oil prices despite concerns raised in the industry, immediately after the news emerged. He explained that the Brent pricing system was used as a marker price for a lot of the global production and because of that, if the shutdown continues, pricing might be affected. However, production is not the only factor that shapes the Brent price, as it depends on a number of other fields. In addition, Brent accounts for a relatively small proportion of the world's total production, so deviations from current pricing levels are not expected, he added.

TAQA issued a statement claiming that the safety of its workers is of paramount importance for the company, which is the main reason for all "non-essential" work on the installation being temporarily terminated, making sure that all the company's efforts are directed toward dealing with the issue.

Fergus Ewing, Scotland's energy minister, stated that the Scottish authorities, including Marine Scotland, were closely monitoring the situation and so far there has been no hydrocarbon release detected and non-essential staff at the platform have been successfully transported away. He noted that the decision on when operations at the platform can resume will be made by the Health and Safety Executive (HSE), which is currently investigating the situation. Once it determines that the pipeline system is safe it will reopen again, after the implementation of any safety measures the HSE finds appropriate, Ewing said.