An oil spill in Mideast Gulf would have less impact

By Frederik Richter and Reem Shamseddine

MANAMA (BestGrowthStock) – It would be easier to contain an oil spill in the Middle Eastern Gulf than the disaster in the Gulf of Mexico has proven, oil officials familiar with the region said on Tuesday.

They see regulations tightening because of the U.S. spill.

“It’s possible that we can have blow-outs here,” Paul Hood, a Qatar-based executive at Maersk Oil told Reuters on the sidelines of an energy conference in Manama.

Unlike the Gulf of Mexico, the Middle Eastern Gulf, a major global supplier of oil, has very shallow waters and is almost a closed sea with its bottleneck link to the Indian Ocean.

But Hood said the impact of an oil spill in the Gulf would be less severe as it could be contained quicker.

“The pressures we see in the Gulf are much more modest … a third of the pressure (in the Gulf of Mexico),” he said.

Hood also said that relieve wells in the Gulf could be drilled in about 60 days, quicker than in the much deeper waters off the U.S. coast.

Oil spilling from BP’s blown-out deepwater well may not be shut off until August, officials said on Monday, after all attempts to contain the spill have failed in what is seen as the United States’ worst environmental disaster.

However, power generation in the Gulf states could be vulnerable to oil spills.

“If there is oil spillage in the Gulf all power plants have to stop straight away,” said Vincent Dewulf, business development manager at Shell Gas & Power International.

Gulf Arab states rely on cooling water from the Gulf for their power generation needed to cool their vast shopping malls and glitzy sky-scrapers, and some plants such as Bahrain’s Al Dur power plant feature integrated desalination systems.


Dewulf said he expected the spill to have a severe impact on all oil majors as regulators will tighten their rules.

“There is no doubt standards will be different,” he said.

Armando Zamora, director general of Colombia’s National Hydrocarbons Agency, told Reuters he expected regulators to become more wary of oil companies.

“They can not just take the word of oil companies that everything is OK, that everything is under control,” he said.

Zamora said the oil spill would be on the agenda of a meeting of regulators from Colombia, Mexico, Brazil and Peru this month. “We need to be prepared for the worst-case scenario,” he said.

The oil spill has cast a long shadow on off-shore production and Washington has imposed a six-month moratorium on deepwater oil drilling.

Off-shore oil production accounts for about 25 percent of total U.S. crude production.

“Obviously most of the growth in U.S. production in the years to come was meant to come from the Gulf of Mexico,” said Morgan Trevor, senior energy economist at the International Energy Agency (IEA).

Trevor said he also expects regulations to be tougher, leading to higher investments and operating costs.

“I think it’s inevitable that safety regulations at least in the U.S. are going to get tougher; that it’s going to cost the companies more I think that’s for sure.”

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(Editing by James Jukwey)

An oil spill in Mideast Gulf would have less impact