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North Sea oil output to rise in December - revised programmes
November 15, 2012 / 12:55 PM / 5 years ago

North Sea oil output to rise in December - revised programmes

LONDON (Reuters) - North Sea oil output from 12 production streams is set to rise by 5.5 percent in December as oilfields return from maintenance, which may weaken a source of support for Brent oil prices.

Output is set to average 2.03 million barrels per day (bpd), based on the latest revisions to loading schedules compiled by Reuters on Thursday, up from 1.925 million bpd in November.

The increase is partly a result of the return from a prolonged period of maintenance of Nexen’s Buzzard oilfield, the largest of the fields that contribute to the Forties crude blend.

“If Buzzard stays up, Forties loadings in December look normal when you add the November cargoes that got deferred,” a North Sea dealer with a trading firm said.

Based on the original loading programmes, usually issued between the 5th and 10th of each month, December output is scheduled to fall by 2.6 percent to 1.895 million bpd.

As of Wednesday, the Buzzard field was pumping 130,000 to 140,000 bpd after restarting on Monday following a power outage that halted production, trade sources said.

The field’s return from a maintenance shutdown that started on September 4 was repeatedly delayed and volatile Buzzard output levels can impact the Forties shipment schedule, in turn affecting the price of the Brent benchmark.

Four North Sea crudes underpin the Brent crude contract - Brent, Forties, Oseberg and Ekofisk, known as BFOE. Forties is the most important of these because it sets the value of dated Brent, used for pricing much of the world’s physical oil.

Output of the BFOE crudes is expected to increase month-on-month in December, based on the latest revisions to loading schedules, because of higher Forties and Ekofisk output.

Ekofisk is scheduled to export 253,000 bpd in December, up from 200,000 bpd planned in November, based on information from trading sources, as lower-than-expected output from offshore fields led to delays in November’s shipping plans.

As a result, trade sources said, three Ekofisk cargoes were moved into December from November.

Despite higher output, Brent prices reflect a perception of tight supply. The December contract - which expires on Thursday - is trading at a premium to January of $1.51 a barrel, up from as low as 87 cents on Monday.

A drop in North Sea output in September led to a spike in Brent prices and concern that the market could be vulnerable to distortion.

Reporting by Alex Lawler; Editing by Anthony Barker

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