Oil Watch:BP Confirms 500,000 Barrel/Day Cut On Pipe Shut in Azeri Feilds.

[tekisui]

LONDON -(Dow Jones)- BP PLC (BP) has confirmed to an analyst that at least 500,000 barrels a day of production from its Azeri fields has been cut after a Baku-Tbilisi-Ceyhan, or BTC, pipeline shut-down, the analyst said Friday.

"I have spoken with BP and after some discussion they agree that a figure of at least half a million barrels per day looks a realistic number for lost production," said Peter Hutton, an analyst at broker NBC in a research note.

Even after the effect of production-sharing-agreements, the loss for BP is likely to be 150,000 to 200,000 barrels a day on a net share basis, Hutton added.

A BP spokesman reiterated that the company is reducing output from the Azerbaijani fields but is "not quantifying" the cuts. It added the company is seeking to maximize the use of alternative routes for the remaining production.

BP is both the operator of the BTC pipeline - where a fire started Wednesday - and of the Azerbaijani fields. It manages and has a 34.1% interest in the Azeri-Chirag-Gunashli, or ACG, field and 25.5% in the Shah Deniz field. It uses BTC for oil extracted from ACG and condensates from Shah Deniz.

In the note, Hutton said the alternative pipeline routes used by BP for the Azerbaijani crude can transport no more than 200,000 barrels a day.
BP has also suggested it could use Georgian railcars. But Hutton said the scenario, for a typical amount of 50,000 barrels per day, would be "impractical at the best of times and probably even more so during the present tensions in Georgia."

Friday, a Russian military convoy reportedly entered the breakaway Georgian region of South Ossetia Friday and Russian planes reportedly attacked a Georgia Base near the capital Tbilisi.

link: http://www.easybourse.com/bourse-actualite/bp/updatebp-confirms-500-000-b-d-azeri-cut-on-pipe-shut-analyst-GB0007980591-502897

[liberal N proud]

1. That should help to keep the price of oil from sliding further