Coming soon: Brent trade with no Brent crude
21 February 2012
, by Joe Brock and Alex Chambers - Abuja/London (Reuters) http://uk.reuters.com/article/2012/02/21/uk-shell-oil-brent-idUKTRE81K16T20120221Brent is the benchmark for pricing two-thirds of the world's oil, but soon there won't be any Brent crude left in it
Royal Dutch Shell's Brent oilfield, among the largest fields ever found in the UK North Sea, is set to be decommissioned in the near future, a company official said on Tuesday.
Brent had an important role in the oil market as the original source of crude for the Brent futures contract.
But output is dwindling, and "Brent" now refers to a blend of North Sea oils.
"The UK's North Sea used to be the ultimate technology frontier but is now a mature oil and gas province," said Ian Craig, executive vice president Shell E&P Africa, speaking at a Nigerian oil conference in Abuja.
"Indeed Shell's Brent field, which is synonymous with the UK industry, is due to be decommissioned in the near future."
Shell has been studying decommissioning options for the field.
A company spokesman said Shell aimed to submit its decommissioning plan to the UK government's Department of Energy and Climate Change (DECC) later in 2012.
Brent is tapped by four platforms called Brent Bravo, Brent Delta, Brent Charlie and Brent Alpha.
One of these, Delta, has already stopped production, although the decommissioning work will take a decade or more, the spokesman said.
"Brent Delta ceased production at the end of 2011," the Shell spokesman said.
"Decommissioning is time-consuming and is likely to take over 10 years."
The Brent field lies 186 kilometres (116 miles) offshore northeast of Lerwick, Scotland, beneath water 140 metres (460 feet) deep.
It was discovered in 1971 and began oil production in 1975.
After a 1.2 billion pound development project in the mid-1990s, it became mainly a natural gas field.
Oil output from Brent was just 7,600 barrels per day (bpd) in October, according to figures from industry newsletter Aberdeen Petroleum Report, a fraction of the more than 400,000 bpd output peak in 1984.
Oil from the Brent field formed the original basis of the Brent crude futures contract, which was launched in 1988 and is now one of the two main global benchmarks used to price oil trades around the world.
As Brent's supply has declined, oil from other fields has been added to the benchmark, which today is based on Forties, Oseberg and Ekofisk crudes as well as Brent, although it retains the Brent name.