Oil, Gas Firms Could Lose Millions Due to Forties Pipeline Shutdown
Independent oil and gas firms EnQuest plc and Premier Oil plc could lose millions of dollars in the event of a prolonged shut down of the Forties Pipeline System, oil and gas analysts at GMP FirstEnergy have confirmed.
The analysts highlighted that EnQuest’s operated Greater Kittiwake Area and Scolty/Crathes development, along with Premier Oil’s operated Balmoral area, non-operated Elgin-Franklin asset and other minor fields, would be impacted as a result of a shut down of Britain’s largest oil pipeline.
GMP analysts have stated that every month of shut down would reduce the energy investment banking firm’s expected cashflow forecast for EnQuest and Premier Oil by around $7 million and between $10-12 million, respectively.
The shut down of the pipeline system would also be felt by a number of other companies, as highlighted by oil and gas analysts at investment banking firm Jefferies. These analysts estimate that thousands of barrels of output from BP plc, Total SA, Chevron Corporation, ExxonMobil, Eni and ConocoPhillips will be affected.
“Forties is one of the four components of the Brent pricing system, and if the duration of the outage is for several weeks it should put upward pressure on the Brent price,” Jefferies analysts said in a statement sent to Rigzone.
Ineos confirmed Monday that it has decided to implement a controlled shut down of the Forties Pipeline system after a hairline crack was found in the pipe at Red Moss near Netherley, south of Aberdeen.
Despite reducing the pipeline pressure while a full assessment of the situation was made, Ineos said the crack extended, which led to the Incident Management Team deciding that a controlled shutdown was ‘the safest way to proceed’.
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