Enron inaction costs £100m

Enron’s decision not to take gas from the North Sea J-Block before October will cost operator Phillips Petroleum and its partners more than £100m in lost production this year. Phillips announced that it had started producing liquids from the Judy platform on 16 April, following the installation of equipment last year to reinject the gas […]

Enron’s decision not to take gas from the North Sea J-Block before October will cost operator Phillips Petroleum and its partners more than £100m in lost production this year.

Phillips announced that it had started producing liquids from the Judy platform on 16 April, following the installation of equipment last year to reinject the gas Enron declined to take.

But the gas reinjection inhibits the production of liquids – it will average 35,000-40,000 barrels/day for the remainder of 1997 whereas the Judy facilities were designed to process up to 95,000 barrels/day.

Assuming Enron does start taking deliveries of gas under its take-or-pay contract in October – by no means a certainty – the partners face about six months of such restricted production.

At a price of $17 a barrel, the loss comes to just over £103m.