BP suffers as leak shuts key pipeline

 
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BP SHARES slumped more than two per cent yesterday morning after the news at the weekend that the Trans-Alaska Pipeline is closed while a leak is repaired.

BP has shut down 95 per cent of oil production linked to a pumping station at Alaska’s North Slope after a leak was found on Saturday.

The 800-mile Trans-Alaska pipeline has been closed while repairs are carried out. The pipe normally carries 620,000 barrels per day, or nearly 12 per cent of US crude output, from North Slope to the Valdez port in the southern Alaska.

BP shares recovered some losses throughout trading yesterday to close down 1.25 per cent at 486.35p.

BP is the biggest shareholder in Alyeska, the company that runs the pipeline, while oil majors ExxonMobil and ConocoPhillips own smaller stakes. BP also operates 15 oil fields in northern Alaska, which rely on the pipeline for transportation.

The shutdown helped push oil prices up more than one per cent yesterday.

The Alaska Department of Environmental Conservation said yesterday there was no restart date planned for the pipeline, but that work to bypass the leaking pipe was ongoing.

“Particularly for BP, it is really important to fix this quite soon,” said Hannes Loacker, oil analyst at Raiffaisen Bank International.

“This company sold a lot of assets and it’s probably facing a small production decline.”

•BP and the China National Offshore Oil Corp (CNOOC) signed an agreement on deepwater exploration in the South China Sea yesterday. A BP spokesman said it was a cooperation agreement with CNOOC to explore in block 43-11 in the South China Sea.