Dec. 13 (UPI) -- Closing the Forties pipeline system in the North Sea, which sidelines almost half of the area's production, means heavy industry losses, a trade group said.
Pipeline operator Ineos shut down the Forties crude network in the North Sea after discovering a "hairline crack" on a pipe near Aberdeen, Scotland, last week. The system carries about 40 percent of the oil produced in the British waters of the North Sea, or about 450,000 barrels of oil per day.
The company said it could be a matter of weeks before repairs are made to the North Sea network. Deirdre Michie, the chief executive at trade group Oil & Gas U.K., said the outage was a devastating blow to the regional energy industry.
"The shutting down of the Forties pipeline does cause significant issues for our industry, financially, operationally and commercially," she said in a statement. "Forty percent of oil production is now shut in and the resulting lost production is worth around $26 million per day at current oil prices to industry."
The price for Brent crude oil, the global benchmark for the price of oil and a component of the basket of oils carried by the Forties system, was up about half a percentage point from Tuesday's close to make a run at $64 per barrel in early trading. At morning market prices, Michie is underestimating the loss by about $2.5 million.
Ineos agreed in April to pay British supermajor BP up to a quarter billion dollars to acquire the 235-mile Forties pipeline system, which ties 85 oil and gas assets in the North Sea to the British mainland.
BP CEO Bob Dudley said of the sale that his company's strategy was now shifting to other parts of the North Sea.
The pipeline operator said Wednesday "a number of repair options are currently being considered and progressed," but it would still be weeks before any fixes are put into action.
Michie's group warned early last year that the North Sea energy sector was in for a long period of decline.