North Sea pipeline shutdown sends oil prices soaring above $65 a barrel

The UK’s main pipeline system in the North Sea has been closed for emergency repairs, pushing the oil price above US$65 a barrel for the first time in over two years.

The Forties Pipeline System (FPS) was shutdown by its operator, privately owned Ineos, followed the worsening of a hairline crack in an onshore section of the 450,000 barrel a day line in Aberdeenshire.

FPS was purchased by the company’s billionaire founder and chairman Jim Ratcliffe just six weeks ago. The system delivers almost 40% of UK’s North Sea oil and gas production.

Its shutdown will have an immediate effect on operators in the region that rely on the capacity provided by the system, including Apache, the owner of the Forties field after which the pipeline was named.

Apache said it had been forced to shut down production at the asset, affecting its own output of 35,800 barrels of oil per day.

Richard Longden, a spokesman for Ineos said that a precise timeframe for the repairs was still being worked out, although the shutdown is likely to last for ‘several weeks rather than days’, with safety a priority.

Reacting to the announcement, Brent crude futures reached a day high of $65.70 a barrel in the 24-hour period following its closure.