IEA Cuts China Crude Output Forecast due to Penglai Oil Spill
OREANDA-NEWS. September 19, 2011. The International Energy Agency slightly lowered its forecast for China's crude-oil output this year and in 2012 because of oil spills at the Penglai 19-3 field in Bohai Bay.
Production issues at the offshore field, a joint venture between ConocoPhillips (COP) and China National Offshore Oil Corp., could lead to a decline in output of 50,000 barrels a day this year and 30,000 barrels a day in 2012, the IEA said Tuesday in a monthly oil-markets report.
"We believe the field could have difficulty reaching its former peak production levels due to operator safety concerns and damage to the reservoir from the shut-in," the IEA said.
China'sState Oceanic Administration ordered a halt to all operations at the field earlier this month and said it wasn't satisfied with Conoco's attempts to clean up and investigate the cause of the spills.
Penglai 19-3 produced about 150,000 barrels a day of crude in June, according to the IEA.
Output fell by 31,000 barrels a day in July, 47,000 barrels a day in August and 150,000 barrels a day in September because of the June spills, which leaked more than 3,200 barrels of oil and oil-based fluids into the ocean.
Although some production at Penglai may resume later this year, platforms B and C, which can produce around a combined 47,000 barrels a day, could remain shut until late in the fourth quarter, the IEA said.
China's crude output in July fell by 100,000 barrels to 4.1 million barrels a day, primarily because of the field's closure, the agency said. "We assume the shut-ins [will] last into September but [be] partially offset by sustained production growth elsewhere," it said.
It said China is expected to produce an average of 4.2 million a barrels a day of crude in 2011 and 4.3 million barrels a day in 2012.
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