BP may shut down Ula field

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The Independent Online
BRITISH PETROLEUM may be forced to shut the Ula oilfield in the Norwegian sector of the North Sea because of low oil prices.

A temporary closure of the field, which produces 30,000 barrels of oil a day, is one of a number of options being considered in an attempt to cut costs, and a decision will be taken late next month or early in February, a spokesman said. BP is the lead operator in the Ula field with a 57.5 per cent stake.

The announcement yesterday is seen by oil industry sources as an attempt to put pressure on Statoil, the Norwegian state oil company, to cut its charges for transporting oil from Ula through the Statoil pipeline to the Ekofisk distribution platform where oil is loaded for shipment to refineries.

These charges are said to be as high as $5 a barrel, according to unconfirmed reports in the Norwegian press. "We have had talks with Statoil and the matter is now with the Norwegian oil and energy ministry," a BP spokesman said.

If Ula is shut down BP will have to pay the costs of care and maintenance but Statoil's revenues will dry up immediately. Some of the 80 workers on the Ekofisk platform may also be affected, a spokesman for BP Norway said.

BP's other nearby North Sea oilfield, Gyda, which produces 40,000 barrels a day and has lower operating and transport costs, is not affected.

But other oilfield operators of marginal oilfields worldwide could be faced with similar choices if the downturn in crude oil prices shows no signs of being reversed in the next 12 months.

North Sea oil prices for delivery in February edged up 35 cents to $10.46 a barrel yesterday, but the outlook remains depressed.

BP was the most actively traded stock on the London market yesterday and prices fell by 8.5p to 908.5p.

In New York shares in Halliburton, the world's largest oil service company, fell by $2 after a profits warning.