Jim Devine wrote:
August 24, 2006
Economic Scene/New York TIMES
The Rapidly Changing Signs at the Gas Station Show Markets at Work
By HAL R. VARIAN
.
The market is at work wile the infrastructure crumbles:
BP Alaska production cut some more
Prudhoe Bay output, already halved, now faces loss of 90,000 bpd due to
compressor problem.
August 24 2006: 9:49 AM EDT
ANCHORAGE, Alaska (Reuters) -- BP PLC said Wednesday that oil production
at its Prudhoe Bay oilfield in Alaska, already running at half capacity
due to pipeline corrosion, has been cut by 90,000 barrels per day (bpd)
for several days due to a technical fault.
A company spokesman said output at the biggest oilfield in the United
States had been reduced to 110,000 bpd after a natural gas compressor in
Gathering Center 2 failed.
We anticipate that fixing the compressor will require several days,"
said BP <http://money.cnn.com/quote/quote.html?symb=BP> (Charts
<http://money.cnn.com/quote/chart/chart.html?symb=BP>) spokesman Daren
Beaudo.
Prudhoe Bay had previously been pumping about 200,000 bpd, around half
its normal output, after serious corrosion in a pipeline led BP to shut
down the eastern half of the field earlier this month.
The spokesman said no one was hurt and no oil was spilled in the latest
incident, which has added to worries over an oil market strained by
reduced Nigerian supply and fearful of potential disruptions in the
Middle East.
After discovering the corrosion in early August, BP said it would have
to close the entire field, which accounts for about 8 percent of total
U.S. output, but U.S. regulators later cleared it to keep operating the
western section.
Oil prices initially rose on the news as dealers feared it would further
squeeze U.S. West Coast refiners, who have bought extra supplies from
around the world this month in order to cover for the lost Alaskan
supply, a staple of their crude diet.
U.S. crude was up as high as $71.98 a barrel in electronic trading
before turning lower. At 5:51 a.m. ET, it was down 8 cents to $71.68.
BP is scrambling to find alternative routes for the oil that would
normally have been produced by the eastern half of Prudhoe Bay, where it
is replacing major transit lines, but officials have cautioned against
expectations that output would be quickly brought back to normal.
Engineers are working on three different bypass lines that could
eventually fully restore production.
BP's main partners in Prudhoe Bay are ConocoPhillips
<http://money.cnn.com/quote/quote.html?symb=COP> (Charts
<http://money.cnn.com/quote/chart/chart.html?symb=COP>) and Exxon Mobil
Corp. <http://money.cnn.com/quote/quote.html?symb=XOM> (Charts
<http://money.cnn.com/quote/chart/chart.html?symb=XOM>)
--------------------------------------
BP's hard road ahead
<http://money.cnn.com/2006/08/14/news/economy/bp_fix/index.htm>
BP plays defense
<http://money.cnn.com/2006/08/09/news/economy/bp_malone/index.htm>
Exxon: Oil, gas and that's it
<http://money.cnn.com/2006/08/22/news/companies/exxon_renewables/index.htm>
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