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UK Oil Output Fell by Record 28% in September-November

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LONDON - The extent of the oil-production outage that contributed to tipping the U.K. economy into a fourth-quarter contraction was laid bare Thursday, as official statistics showed production of crude fell nearly 30% in the three months to November.

Production of petroleum fell a record 27.9% compared with the same period the previous year, according to energy department data, with output particularly hit by a lengthy outage at Buzzard, the largest producing field in the North Sea.

Last week, the U.K. statistics office said the closure of Buzzard, operated by Canada's Nexen Inc., was a big reason for the 0.3% contraction in the final three months of 2012. The field, which was shut for maintenance, produces up to 220,000 barrels of oil a day.

Production of natural gas also fell sharply from September through November--20.6% to be exact. This was mainly due to a continued outage at the Elgin natural gas field and to maintenance at the St. Fergus terminal, which processes gas from over 20 North Sea fields providing around 20% of the U.K.'s daily needs.

Separately Thursday, the statistics office said weak output from U.K. mines and quarries--mostly comprising North Sea oil and gas--reflects the longer-term decline in reserves. Output in the sector is now less than 40% of its 1999 peak, equivalent to an annual rate of decline of more than 6%, the office said.

Production at Buzzard has now resumed, according to oil traders. Barring more severe disruptions in the North Sea, oil and gas output should recover in the first three months of 2013, potentially boosting economic activity overall.

Total production of U.K. indigenous primary fuels in the third quarter fell 17.7%. Electricity from nuclear and from wind and hydro sources both increased.

Jason Douglas and Cassie Werber contributed to this item

Copyright (c) 2012 Dow Jones & Company, Inc.

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