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Faltering North Sea Oil Production Set To Tighten Global Markets

Crude and lease condensate production in the North Sea is set for lower levels in the summer months, further tightening the global oil market which is already grappling with production declines in Iran and Venezuela, OPEC’s cuts, and a contamination issue that shut some Russian pipeline supplies to Europe, according to Rystad Energy.

Current unplanned outages at Oseberg and Flotta in the North Sea restrict a total of 160,000 bpd of North Sea production, the energy research firm said on Friday.

Rystad has estimated that outages in the North Sea in May will be 185,000 bpd. Yet, the biggest disruption is expected next month, when North Sea oil production is seen down to its lowest level since August 2014 because of scheduled maintenance at Ekofisk.

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According to Rystad Energy’s field production and maintenance forecast, North Sea oil production will slump in June to 2.28 million bpd, when 462,000 bpd will be lost due to outages. Turnaround activity at the oil fields feeding Ekofisk will be the primary driver for the lower North Sea production, accounting for 230,000 bpd of the total outage in June 2019.

“The oil market is in for a tight start to the summer indeed,” Rystad Energy said.

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Apart from scheduled maintenance this summer, North Sea production has been recently disrupted by unplanned outages. One was at Oseberg—whose crude oil is one of the components of the Brent Crude benchmark—where Equinor stopped production earlier this month as a precaution due to issues with fire water pumps, and then extended the shutdown period more than initially expected.

According to an Equinor email to S&P Global Platts, the Oseberg oil field resumed production on Monday.

In the UK North Sea, repairs on pipelines shut down production at three platforms as of last Friday: Claymore, the Golden Eagle, and Tartan.

“We are carrying out repairs to a valve on the main export pipeline from Claymore to the Flotta terminal,” a spokeswoman for the operator Repsol Sinopec told Energy Voice.

By Tsvetana Paraskova for Oilprice.com

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