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Woodside Must Meet Safety Order to Restart Oil Field

Bloomberg.com

By Angela Macdonald-Smith

April 21 (Bloomberg) — Australia’s National Offshore Petroleum Safety Authority issued a prohibition notice to Woodside Petroleum Ltd. preventing the restart of output at the Vincent oil field after a fire on the production ship.

The order will remain until systems damaged by the fire are “fit for service and do not pose a risk to safe options,” the authority said today in an e-mailed statement. The fire caused “extensive damage” to a gas compression plant on the vessel, it said.

Output was stopped at the $720 million Vincent venture off the northwest coast on April 13 after a blaze in one of two gas compression systems on the Maersk Ngujima-Yin production ship. Woodside’s per-share earnings in 2009 may be 3 percent lower than estimated should Vincent stay shut for the rest of the quarter, UBS AG said in an April 15 report.

The fire “may have also affected other safety-critical plant or systems of the facility,” the authority said in the statement.

Woodside, 34 percent owned by Royal Dutch Shell Plc, fell as much as A$1.61, or 4.2 percent, to A$36.69 on the Australian stock exchange and was at A$36.79 at 1:24 p.m. in Sydney. The decline was deeper than the drop of as much as 3.6 percent in the exchange’s benchmark energy index.

Woodside can’t comment on the authority’s statement, on damage to the ship, or estimate how long production may be halted, Roger Martin, a Perth-based spokesman for Australia’s second-biggest oil and gas producer, said today by telephone.

The Vincent field, 40 percent owned by Mitsui & Co., delivered 1.7 million barrels to Woodside in the fourth quarter of last year, making it the company’s third-biggest oil source, UBS said. The field lies in the WA-28-L permit about 50 kilometers (31 miles) north of Exmouth. No one was hurt in the fire.

The production ship is owned and run by Copenhagen- based A.P. Moeller-Maersk A/S and operates at the Vincent field under a lease contract.

To contact the reporter on this story: Angela Macdonald-Smith in Sydney at[email protected]

 

Last Updated: April 20, 2009 23:26 EDT 

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