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Australia oil producers say no force majeure

SINGAPORE: Australian oil producers said on Wednesday it was premature to declare force majeure on crude liftings despite supply disruptions caused by a tropical cyclone off the country's northwest coast.

Under category four, tropical Cyclone Olivia, was seen as a major threat to shipping and on-shore and off-shore oil production as it passes the northwest coast.

Operators at the various terminals told Reuters that they have not yet declared any force majeure on crude liftings.

"There is no need to declare force majeure yet," a source at Broken Hill Pty Co Ltd BHP.AX said. "Our buyers are willing to wait (for supplies)."

On Tuesday afternoon, several oil producers were forced to shut their oil and gas production in the path of the cyclone for safety measures.

The production losses from both Griffin and Cossack fields were estimated at 200,000 barrels per day (bpd).

Woodside Petroleum Ltd had disconnected the Cossack Pioneer oil vessel late on Tuesday. The vessel processes 115,000 bpd of oil was expected to remain shut for at least five to six days.

Equal partners in the field are Woodside, BHP Petroleum, BP Developments Australia Ltd BP.L, Chevron Asiatic Ltd Japan Australia LNG Pty Ltd and Shell Development (Australia) Pty Ltd.

Also on Tuesday, BHP had shut its Griffin field.

Traders said offshore production of Thevenard, Herriet and Barrow Island crudes, as well as onshore production of Northwest Shelf condensate were also threatened by the storm.

Traders said crude liftings at the following terminals have been affected by Olivia: Thevenard crude from the offshore Saladin terminal, Barrow Island crude from the Barrow Island terminal; Cossack from the Cossack Pioneer, Northwest Shelf condensate from Withnell Bay and Herriet crude at Varanas Island terminal.

So far, these supply disruptions have not yet affected spot prices of Australian crudes, traders said.

"Cossack remains at a discount to APPI Tapis until the full extent of the cyclone is known," an Australian trader said.

In the past week, Cossack was offered at APPI Tapis less 10-20 cents per barrel on sluggish regional demand.-REUER