The Energy Dept. says it is prepared to provide oil from the U.S. Govt.'s emergency supplies
Pipeline corrosion disrupts suppliesEastern side of Prudhoe Bay will be shut down firstProduction will be reduced by four lakh barrels a day
ANCHORAGE (ALASKA): Oil company BP has indefinitely shut down the U.S. biggest oilfield after finding a pipeline leak, removing about eight per cent of U.S. oil production and stoking fears that already high oil prices will shoot up further.
Steve Marshall, president of BP Exploration Alaska, said on Sunday that the eastern side of Prudhoe Bay would be shut down first. The company will then move to shut down the west side, a move that could close more than 1,000 Prudhoe Bay wells. Once the field is shut down, BP said oil production would be reduced by 400,000 barrels a day. That is close to eight per cent of U.S. oil production or about 2.6 per cent of U.S. supply including imports, according to data from the U.S. Energy Information Administration.
BP officials said they did not know how long the Prudhoe Bay field would be off line. ``I don't even know how long it's going to take to shut it down,'' said Tom Williams, BP's senior tax and royalty counsel.
Meanwhile, the Energy Department is prepared to provide oil from the U.S. government's emergency supplies if a refinery requests it because of the disruption of supplies from Alaska, a department spokesman said Monday.
"We are taking a very serious look at this,'' said spokesman Craig Stevens, referring to the loss of nearly half of oil shipments from Alaska's North Slope because of a pipeline corrosion problem.
Oil prices spike
Oil prices jumped by more than $1 a barrel on Monday following the production shutdown in the U.S. state of Alaska and the violence in the Middle East.
Light, sweet crude for September delivery was up $1.74 to $76.50 a barrel in electronic trading on the New York Mercantile Exchange. At London's ICE Futures exchange, brent crude for September jumped $1.22 to $77.39 a barrel. AP