BG, Statoil Halt Drilling in Egypt as Unrest Escalates
Statoil Headquarters in Oslo
Heidi Wideroe/Bloomberg
The headquarters of Statoil ASA in Oslo.
The headquarters of Statoil ASA in Oslo. Photographer: Heidi Wideroe/Bloomberg
BG, Statoil Halt Drilling in Egypt as Unrest Escalates
Dana Smillie/Bloomberg
A crude oil tanker owned sails on the Suez Canal in Ismailia, Egypt.
A crude oil tanker owned sails on the Suez Canal in Ismailia, Egypt. Photographer: Dana Smillie/Bloomberg
BG Group Plc and Statoil ASA halted drilling in Egypt as a sixth day of protests against President Hosni Mubarak’s regime began to take a toll on the oil and gas industry, the country’s biggest export earner.
Apache Corp., which got about a third of its production revenue from Egypt in 2009, said its Cairo offices were shut today. BP Plc, the largest foreign investor in Egypt, made plans to evacuate the families of expatriate workers as Royal Dutch Shell Plc, Schlumberger Ltd. and Transocean Ltd. began relocating staff.
Brent oil earlier today surged to a 28-month high on concern that anti-government riots could close the Suez Canal and parallel Sumed pipeline, which together can transport more than 4 million barrels a day of oil. Egypt has Africa’s third- largest gas and sixth-biggest oil reserves, accounting for about 12 percent of gross domestic product.
“The real concern from an oil and gas perspective is the risk of political unrest extending to other parts of North Africa,” Bank of America Merrill Lynch said in a report.
Egypt pumped 742,000 barrels a day of crude and 62.7 billion cubic meters of gas in 2009, according to BP data. By comparison, Saudi Arabia, the world’s largest crude exporter, produced 8.4 million barrels of oil a day in January, according to Bloomberg estimates.
Without Delay
Opposition leaders have rallied around Mohamed ElBaradei, the former head of the United Nations’ nuclear watchdog agency, as protesters defied a curfew and stepped up demonstrations against Mubarak. Brent erased gains as the head of traffic for the Suez Canal’s operator said vessels were passing without delay through the waterway.
Eni SpA, Italy’s biggest oil company, is repatriating 250 workers and their families from Cairo, Ansa news agency reported, without saying where it got the information.
Schlumberger, the world’s largest oilfield services provider, and Diamond Offshore Drilling Inc., the largest U.S. offshore drilling contractor, said they are moving some workers and their families who are based in Egypt.
Transocean, owner of the world’s largest fleet of offshore drilling rigs, said it’s taking precautions to safeguard employees in the capital city and Alexandria, said Guy Cantwell, a spokesman for the Vernier, Switzerland-based company.
Suspended
Transocean has five rigs operating in Egyptian waters, including the Discoverer Americas, which is under lease to Statoil for $486,000 a day. Offshore crew changes have been suspended because helicopter service from the Egyptian coast has been halted, Cantwell said today in a telephone interview.
BG said production continues unaffected in Egypt, as does its liquefied natural-gas operations, even though drilling has been temporarily suspended.
A decision has been taken to withdraw non-essential expatriate workers and their families, Neil Burrows, a company spokesman, said in an e-mailed statement.
Statoil, Norway’s largest oil company, also stopped drilling in Egypt, said Baard Glad Pedersen, a company spokesman. It started drilling with Transocean’s Discoverer Americas rig in October in the El Dabaa area, west of the Nile Delta.
“Due to the uncertainty tied to the current situation and how long it will last, we’ve chosen to reduce activity offshore to a minimum,” Glad Pedersen said.
Shell said in a statement that a number of its senior and key personnel remain in Egypt. “We are in touch with all our staff in Egypt, who have been advised to stay at home,” the company said.
Russia’s OAO Novatek and OAO Lukoil also began pulling staff out of the country. Novatek’s exploration program in Egypt isn’t affected, a company spokesman said by telephone.
Gas Natural SDG SA, Spain’s biggest utility, said the Damietta natural gas liquefaction plant in Egypt is operating normally. A commercial office in Cairo has been closed, said a spokeswoman for the Barcelona-based company.
To contact the reporters responsible for this story: Marianne Stigset at mstigset@bloomberg.net; Eduard Gismatullin in London at egismatullin@bloomberg.net.
To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net.
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