BP Will Delay Thunder Horse Platform – Will Retrieve Failed Components For Repair – Stock and Oil Prices Up

BP Will Delay Thunder Horse Platform – Will Retrieve Failed Components For Repair – Stock and Oil Prices Up

Drilling Platform
BP Photo

BP Plc (formerly British Petroleum) announced that the Thunder Horse production platform in the Gulf of Mexico will need to be fixed, delaying the start of production until at least the middle of 2008. The company will retrieve the seabed components of the platform and then rebuild / replace the failed components.

BP discovered the problem while conducting pre-commissioning tests by pumping water through the system to establish system integrity. They say that the equipment passed all the industry standard tests and regulatory requirements, but failed under their own prolonged and rigorous tests.

The company says that the platform is the largest production drilling quarters semi-submersible platform in the world. BP said it had decided to retrieve both the damaged sea-bed manifold and a second manifold for further examination and onshore testing. The second manifold displayed a similar failure during testing last week.

Right now, BP pumps about 270,000 barrels of oil per day from nearly a dozen fields in the Gulf, including the facilities at Pompano, Marlin, Horn Mountain and Na Kika. The Thunder Horse field was discovered in 1999, and the company expects to process 250,000 barrels of oil a day when their platform is operational. The oil and gas will be transported to existing shelf and onshore interconnections via the Mardi Gras transportation system.

The world’s largest platform was supposed to be operational back in 2005, but was delayed due to the hurricanes. Just last month the company had to shut down part of their Prudhoe Bay oil fields because of corrosion. The company is also facing problems concerning a 2005 Texas City refinery explosion that killed 15 people.

Oil rose more than a dollar to $64.34 a barrel on Monday after buyers heard the news. The BP stock was last traded at $65.55 per share after a last closing price of $64.86. Today’s high was $65.73 per share.

By John Waters
Best Syndication Writer



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