Fire-hit Azeri-Turkish oil pipeline to remain closed for 1-2 weeks

The blast occurred late Tuesday in a pump at a section near the eastern town of Refahiye, in Erzincan province. The fire was likely to continue burning for another two days until the oil remaining in the pipe runs out, an official from Turkey's state-run oil and gas company BOTAS told the state-run Anatolian Agency.

Stocks at the Ceyhan depot, which had been used to keep the one million barrels per day (bpd) pipeline flowing have run dry, the official added.

"No trace suggesting sabotage has been found so far, but the cause will become clear after the fire is over," the official said.

"The explosion is under control. Consequently, our fire-fighting efforts continue," Dogan News Agency quoted Guler as saying.  

Although the local authorities ruled out the possibility of sabotage and said a fault in the system had been detected before the blast; PKK terror organization reportedly has claimed the responsibility. The investigation is underway to find the cause of the blast.

The supply concerns helped to push oil prices higher and jump back above $120 a barrel on Thursday. Light, sweet crude for September delivery advanced $1.64 to $120.20 a barrel on the New York Mercantile Exchange, after earlier rising as high as $121.78.

In London, September Brent crude added $1.45 to $118.51 a barrel.

BTC PARTNERS DECLARE FORCE MAJEURE

BP said the BTC partners had declared force majeure on exports, freeing themselves from contractual obligations, Reuters reported.

BP said on Thursday the group which it leads producing oil in Azerbaijan had started diverting crude slated for the Turkish port of Ceyhan to other routes, including the Georgian port of Supsa, after the explosion.

"We are actively considering alternative routes," BP's spokeswoman in Azerbaijan told Reuters.

She said some crude had already been diverted to Supsa on the Black Sea, adding BP and its partners had started reducing oil output from their fields to avoid a glut on the onshore facilities.

The BTC pipeline pumps one million barrel a day, equivalent of more than 1 percent of world supply, from fields in the Azeri sector of the Caspian Sea to Ceyhan on the Turkish Mediterranean coast.

BP owns 30.1 percent of BTC, while Socar holds 25 percent. Other shareholders include U.S. Chevron and ConocoPhillips, Norway's StatoilHydro, Italy's ENI and France's Total.