North Sea oil field Buzzard remains shut, helps ease Forties crude surplus

Sherry Su, Bloomberg June 05, 2024

(Bloomberg) – The unplanned shutdown in Buzzard, the biggest feeding oil field for North Sea Forties crude, has caught many traders by surprise and is likely to help ease a surplus.

An offshore oil drilling platform in the North Sea. (Photographer: Carina Johansen/Bloomberg)

The field was halted unexpectedly late last month. Cnooc International Ltd., its operator, declined to comment on when the field will be back.

The shutdown comes at a time when the grade is suffering from lackluster demand, especially from China. Six out of eight cargoes for May loading are still sitting on tankers when they would normally be delivered to customers.

Buzzard’s share of Forties crude output dropped to 2% in the week to May 26, and zero a week later. That’s down from about 22% normally, according to Ineos which operates the Forties Pipeline System.

Forties cargoes for June loading are now face lengthy delays, which may help ease a mini supply glut, said traders involved in the market. It nevertheless depends on the duration of the shortage, which remains unclear.

The lack of contribution from Buzzard also means Forties is getting lighter. Its API, a measure for crude density, will rise to 43.2-to-44 degrees, up by nearly 3 degrees from normal levels, according to Ineos website. That’s not ideal for refineries seeking to produce more jet fuel or diesel.

Buzzard reached peak production of 80,000 boed after its phase II started production in 2022, Cnooc said on its website. Today it’s closer to half that level of output.

The field was shut from April 27 for 12 days of planned maintenance. There is another planned turnaround in late August for about 14 days, the company said last month.

Forties was planned to load seven cargoes totaling 163,000 bpd in June, and seven cargoes equating to 158,000 bpd in July, according to loading programs seen by Bloomberg.

Connect with World Oil
Connect with World Oil, the upstream industry's most trusted source of forecast data, industry trends, and insights into operational and technological advances.