BP said it had contingency plans to replace the lost output including chartering ships to move oil from different operational centers.You know, it makes me wonder how long they think the pipeline repairs will take...
"We are certainly looking at options to replace the lost oil from the North Slope," a BP spokesman said. "I'm sure other companies are doing the same."
Leading ship brokers said BP had made enquiries for VLCCs from West Africa, Arzew in Algeria and the Gulf.
An angry opinion piece from the Houston Chronicle here:
Such is the state of the world's oil markets. After five weeks of fighting in the Middle East, amid recurring violence in Nigeria and Iraq, one company's lax maintenance can roil the markets.Like angry talk? Try this slap:
BP's shutdown comes after a leak in March spewed 267,000 gallons of crude onto the Alaskan tundra and sparked a criminal investigation of BP's practices.
The U.S. Transportation Department ordered inspections of BP's Alaskan pipelines after the leak. It told the company that the absence of a technique known as "smart pigging," which monitors pipelines for corrosion, was a significant lapse, a company spokesman said in a front-page story Tuesday. Until then, BP was using other testing methods it thought were adequate but hadn't smart pigged the lines since 1998, a senior company official in Alaska told the trade publication Petroleum News in May.
The results of the government-ordered tests, completed last week, were a "real eye-opener," the spokesman said.
BP says it will repair 16 miles of pipe that have corroded. The process could take weeks or even months.
The company's recent performance makes its ads touting its alternative fuel research and environmental friendliness seem like a self-parody. Vanity Fair's naming of Browne as a "green" executive a few months ago, which looked like shameless puffery then, now seems unconscionable.Ouch.
As prices rise at the pump, BP's green and yellow flower becomes a symbol that stands not for "beyond petroleum" but "below par."
UPDATE: About a "smart pig" here.
And I probably need to mention again that I was an inhouse counsel for a couple of major oil & gas companies in Houston for several years.
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