North Sea Oil Output Seen 4% Lower in January Than December

By Cassie Werber

LONDON--The amount of crude oil to be pumped from fields in the North Sea in January will be lower than in December, according to loading programs for the four key grades.

The biggest fall will be in the Brent grade, where only five cargoes of crude will be loaded, compared with seven scheduled to load in December. Loading programs are released and circulated among oil traders and brokers, but don't give a perfect indication of oil volumes because they can be subject to change.

The total month-on-month fall will be 3.9%, according to the programs.

These changes are often seasonal, and can alter dramatically if one of the four key fields -- Brent, Forties, Oseberg and Ekofisk -- have scheduled maintenance work or need to be shut in for emergency reasons.

Overall, however, production in the North Sea is in decline. To date, 41 billion barrels of oil and gas have been produced from the U.K. continental shelf, but less than half of that figure remains, according to a government report published in November.

In January 2014, the other field to produce less oil will be Oseberg, where only seven tankers will be loaded rather than the eight in December. A standard tanker is very large, able to carry 600,000 barrels of oil, so even one less tanker constitutes a substantial difference.

The Forties field will load 21 tankers, one more than in December, while Ekofisk will load the same 16 tankers as in the previous month.

Together, the four grades make up a basket of crudes called BFOE, which is widely still referred to as Brent crude. The grade is of international importance because it remains one of the most liquid markets in which market forces, rather than government decisions, set prices.

Brent is used to benchmark more than half of the world's oil, though discussion in the markets has raised the question of whether, as North Sea supplies continue to decline, another benchmark may need to be found.

 
North Sea loading programs 
                January                     December 
               (barrels)    Volume(B/D)    (barrels)    Volume (B/D) 
Brent          3,000,000       96,774      4,200,000     135,484 
Forties       12,600,000      406,452     12,000,000     387,097 
Oseberg        4,200,000      135,484      4,800,000     154,839 
Ekofisk        9,600,000      309,677      9,600,000     309,677 
Total BFOE    29,400,000      948,387     30,600,000     987,097 
 

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