BP delays start of thunder horse production

Oil giant BP was under fresh pressure today after it emerged safety concerns would delay the start of production at a key field in the Gulf of Mexico.

The problems at the Thunder Horse platform are on top of a series of incidents which have led to investors to raise questions about BP’s safety record.

The company’s Prudhoe Bay oil field, the largest in the US, was partially closed last month after corrosion was found in pipelines. It also emerged today that BP was undertaking a root-and-branch review of its global operations following last year’s Texas refinery blast, which killed 15 people.

BP said tests carried out over the past four months revealed metallurgical failure in components of the subsea system at the Thunder Horse platform, which was left listing when Hurricane Dennis passed through the Gulf in July 2004.

As a result of the failure on a subsea weld, BP said it would now retrieve and replace all the components it believes could be at risk. The work will be done over the course of the next year, meaning the company does not expect production from Thunder Horse to begin before the middle of 2008.

The platform is the largest in the Gulf and is expected to produce about 240,000 barrels of oil and 200 million cubic feet of natural gas per day. The Thunder Horse field was discovered in 1999.

BP added that it was too early to estimate the additional cost involved in replacing the affected systems.

The review of global operations is likely to be similar in scale to the major overhaul introduced by US oil giant Exxon following its Alaskan oil tanker spill in 1989. The shake-up helped make Exxon one of the world’s safest and most financially successful energy group.

The BP review will be headed by John Mogford, vice-president of safety and operations, and could take five to ten years to implement.

A spokesman for the London-based firm said the aim of the review was “to find problems if there are problems and to put in long-term cultural changes".

BP is also being investigated over the alleged manipulation of crude oil and petrol markets and is embroiled in an alleged plot to manipulate propane prices.

In June, former BP trader Dennis Abbott, of Houston, pleaded guilty to partaking in a conspiracy “to manipulate and corner the propane market” but BP has denied any wrongdoing.