Oil flow resumes from northern Kuwait fields following accident

By the OGJ Online Staff

LONDON, Feb. 6 -- Kuwait has restarted production at its northern oil fields, where 600,000 b/d -- a third of the nation's output -- was shut in last week after an explosion damaged a gathering station.

Production resumed at 50,000 b/d and will rise to 100,000 b/d within a week. It could be 6 weeks before the production is back at 600,000 b/d.

Kuwait is meeting exports from its 14 million bbl in storage. The oil ministry has calculated that the production loss due to the explosion, which killed four persons and injured a dozen others, could be limited to less than 300,000 bbl. Kuwait can meet export demand for 3 weeks from storage.

Kuwait's Oil Minister Adel Al-Subaih, who offered to resign over the incident, said that a plan to increase production gradually from fields in the south and west of the country was being put into place.

In addition to the oil processing facilities, the explosion damaged an electricity generation plant and a 300 MMcfd gas booster facility. Damage to the latter forced the state operating company, Kuwait Oil Co., to declare force majeure on exports of liquefied petroleum gas, used mostly for heating and cooking in Asia.

Although the export ban on LPG remains, Kuwait has ensured that all Asian customers for its crude have been supplied and cargoes for refiners in Japan and Korea were lifted on schedule Wednesday.

The accident and new American Petroleum Institute data have firmed prices on the London International Petroleum Exchange. Brent crude prices rose 51¢, or 2.7%, to $19.69/bbl in the past week. Meanwhile, the London insurance market is bracing itself to meet claims resulting from the explosion. The affected facilities cost $350 million and were covered by insurance