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33

BP Suffers $100mn Daily Loss

On Saturday a pipeline carrying nearly half of Britain's oil was gradually being shut down ahead of a strike over pensions that has already closed a major refinery and prompted some panic fuel buying

On Saturday a pipeline carrying nearly half of Britain’s oil was gradually being shut down ahead of a strike over pensions that has already closed a major refinery and prompted some panic fuel buying.

The Grangemouth refinery in Scotland produces a tenth of Britain’s petrol and diesel but also has a power station that supplies the neighboring Kinneil plant that processes the crude oil coming ashore from 70 fields in the North Sea.

Without that power Kinneil cannot operate. In preparation, several of the North Sea fields have begun to cease production.

The Forties pipeline carries an average of 700,000 barrels per day (bpd), close to half the 1.5mn barrels the country produces daily. A fifth of Britain’s gas supply also relies on the Forties system.

The Forties oil alone is worth 50mn pounds ($100mn) a day and the pipeline’s closure for the two-day strike will make a significant dent in already stretched government coffers, which rely on hefty tax revenues.

The government says there will be no overall shortages of fuel but accepts that there may be some local supply problems, particularly in Scotland and northern England.

BP said that assuming it got power back as soon as the strike ended and Forties fields resumed production rapidly, the pipeline could be back in operation within 24 hours but might take a few more days to get back to full flow.