Total Declares Force Majeure at Girassol Platform

LONDON (Dow Jones Newswires), July 14, 2010

Total has declared a force majeure at the Girassol crude oil platform in Angola because of a technical problem, a company spokesman said Wednesday.

Force majeure is a term in a contract that can be invoked when conditions beyond the control of the company make it impossible to fulfill the terms to which it originally agreed.

"Consequently production has been reduced, and the loading plan has had to be slightly reorganized," said the Total spokesman.

A trader, who had seen the notice that Total sent to lifters, said a leak occurred on the gas injection riser on July 5, so it is no longer possible to perform any gas injection at the Girassol production platform.

"Losing 40,000 barrels per day (of Girassol crude) over a month is the equivalent of just over one cargo in a month," said a second trader of West African crude. He said he didn't expect to see values for spot Angolan crude gain much ground following the outage. "Personally I'm bearish Angolan grades for September (loading,)" the trader said.

The trader pegged values for actively traded Angolan crudes Kissanje and Nemba at a discount of 70 cents against the North Sea Dated Brent benchmark.

A total of 11 cargoes for loading from mid-July to late August have been deferred, the trader said.

Copyright (c) 2010 Dow Jones & Company, Inc.