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Shell’s oil spill is bad news for all as energy prices rocket

The flow of oil into the North Sea may have been reduced to no more than a trickle, but the damage to Shell’s reputation has already been done.

The Royal Dutch Shell platform Gannett Alpha is seen in the North Sea in a 2009 file photograph Photo: REUTERS

Richard Fletcher

By 9:05PM BST 16 Aug 2011

Yes, it’s tiny when compared to Exxon Valdez or BP’s Gulf of Mexico disaster, but the Gannet oil field spill still ranks as Britain’s worst oil spill for over a decade.

More importantly, as my colleague Rowena Mason reports on B5, the spill has highlighted the increasing difficulties facing Shell (and other explorers) when trying to pump oil and gas out of the North Sea.

Even before the Gannet leak it had been a challenging a year in the North Sea for Shell. All four of its Brent platforms stopped producing for eight months, when part of one fell into the sea in January.

The problems didn’t stop there. Following a series of gas leaks the Health and Safety Executive (HSE) forced Shell to close one of its largest North Sea platforms. It is not expected to come back on stream until next year.

This year has also witnessed the first death on one of Shell’s North Sea installations for five years, when an abseiler plunged to his death.

The reality is that a number of North Sea oil platforms are now almost 50 years old and so are the pipelines. Corrosion, according to the HSE, is becoming an increasing problem.

With maintenance costs spiralling no wonder there appear to be so few buyers for the billions of pounds worth of North Sea assets dumped on the market by the oil majors in the past year.

This situation was only aggravated by the Government’s tax grab on North Sea oil in the last Budget.

North Sea exploration is going to get a more complicated and problematic in the coming decade. Expensive shutdowns and equipment problems are inevitable.

That’s bad news for all of us, not just Shell. With energy prices soaring we need every drop of oil and gas from our depleting fields we can get.


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