LONDON: Deliveries of crude oil through the Forties pipeline in the North Sea are under force majeure for the first time in decades and operator INEOS said on Thursday there was no timeline yet for repair work that could last several weeks.
The 169-km long pipeline, which carries around a quarter of all North Sea crude output and around a third of Britain's total offshore gas production, has been closed since Monday, following the discovery of a small crack in part of the system onshore in Scotland.
According to Reuters news archives, this is the first declaration of force majeure on shipments of a North Sea crude in many years.
Force majeure, which suspends a company's contractual obligations in the wake of situations that lie beyond its control, is extremely rare in the North Sea.
Oil traders said this was the first declaration of force majeure on North Sea crude shipments in over 20 years.
The last major incident which led to a declaration of force majeure took place after the 1988 Piper Alpha disaster, in which 167 men died after a gas explosion on an oil platform.
A spokesman for privately-owned INEOS, which runs the 200,000-barrel per day Grangemouth refinery in Scotland, said the company continued to assess the situation.
"The pipeline has been in place since 1975 and has been operating since then," INEOS spokesman Richard Longden said.
"It is a unique instance. It just happens to have been on INEOS' watch, shortly after we acquired it."
INEOS bought the system from BP in late October for $250 million.
Forties crude is the biggest of the streams of oil supply that come from the North Sea, one of the world's oldest crude basins, and underpins the international dated Brent benchmark price.
The International Energy Agency, which advises Western governments on energy policy, said on Tuesday was monitoring the situation, but saw no need to release strategic stocks of crude as the market remained well supplied.
"For the time being, in response to the Forties pipeline incident, we have reduced our estimate for UK production in December by 300,000 bpd, and we will revisit this as the situation becomes clearer," the IEA said in its monthly oil market report on Thursday. - Reuters
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