Forties Oil Pipeline Crack Under Investigation by U.K. Regulator

(Bloomberg) -- The U.K. Health and Safety Executive is investigating the causes of a crack in a key North Sea oil pipeline that disrupted production at more than 80 fields for weeks.

While an HSE spokesman couldn't comment further on the matter, such investigations aren't automatically triggered. Incidents must be severe or unusual enough to meet the regulator's criteria for a probe, said Martin Wayland, a member of the watchdog's gas and pipeline team.

The shutdown of the Forties Pipeline System roiled oil markets from the U.S. to Asia. The link is critical because it transports the single largest constituent part of Dated Brent crude, a benchmark that underpins more than half the world's physical oil prices. The fault on the 40-year-old network underscored the risks inherent in Europe's aging energy infrastructure.

HSE inspectors examined repair work by the pipeline's operator, Ineos AG, and determined it was done “safely and to appropriate standards” before the conduit returned to service on Dec. 30, the spokesman said. The regulator's investigation is ongoing and it's unclear when it could finish.

Ineos acquired the Forties pipeline from BP Plc for $250 million about six weeks before announcing the discovery of the crack in December. Ineos director Tom Crotty said in an interview with Bloomberg television the damaged area of the pipe abutted a rock, which may have caused a problem. He also pointed to the age of the link as another risk factor.

Inspection Record

A BP spokesman declined to comment on the investigation and the company hasn't publicly disclosed details of its inspection record during the time it owned and operated Forties. Richard Longden, an Ineos spokesman, said the company will “continue to work with HSE to provide them with information as required,” and that “safety has been and continues to be our highest priority.”

The HSE's Wayland, who couldn't talk specifically about the Forties investigation, said the watchdog's primary role is judging the behavior of operators.

Companies have internal policies summarized in a “major hazard prevention document” that the HSE regularly reviews to ensure compliance with U.K. law and best practices, Wayland said. They also make sure operators are correctly carrying out safety procedures outlined in the policy. Those documents are typically not public.

Though pipelines in the U.K. are many years old, they are generally well-maintained and regularly inspected, Wayland said.

“Historically we don't have a big issue in the U.K. with pipelines, at least not from an age standpoint,” he said by telephone from London. “Pipelines are inspected and defects are identified and there are standards against which defects are judged.”

If the HSE determines there is a violation it can take remedial measures ranging from verbal instructions to referring companies to prosecutors. There are no public enforcement actions directly related to the Forties pipeline in HSE's public database from prior inspections.

To contact the reporter on this story: Kelly Gilblom in London at kgilblom@bloomberg.net.

To contact the editors responsible for this story: James Herron at jherron9@bloomberg.net, Rakteem Katakey

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