The deferral of output from Thunder Horse is a further blow to BP, which is working to restart oil flow in Prudhoe Bay, Alaska, after the discovery of serious corrosion of pipelines.

The crude oil price rose by almost a dollar per barrel to $63.95 yesterday, as BP revealed that some 250,000 barrels per day of oil and 200 million cubic feet of gas would be delayed until the middle of 2008.

The largest floating offshore platform built to date, with a surface area equal to three football pitches, Thunder Horse’s planned debut at the end of 2005 was ruined when the structure was found listing 20 degrees after the passage of Hurricane Katrina. Subsequent investigation revealed that the flooding of the ballast tanks was the result of a technical fault, not the storm.

The new problem emerged after tests of the manifold, the structure that controls oil production from wells on the seabed, which revealed metallurgical weakness. During the lengthy shutdown of the platform, BP sources indicated, intense cold provoked a chemical reaction within the manifold, causing hydrogen to penetrate and weaken welds.

City analysts estimated that BP would suffer a 2 per cent hit to its earnings next year from loss of anticipated revenue from its 75 per cent share of Thunder Horse output. The remaining quarter share is held by ExxonMobil. BP’s production growth targets will also be affected but yesterday its share price was unaffected by the news.

BP gave no estimate of the cost of retrieving and replacing the seabed manifolds but said that it “does not expect production to begin before the middle of 2008”.

The oil company hopes to restore output in Prudhoe Bay soon, but the next few months will be bruising for BP as jury trials commence in claims brought by victims of the Texas City refinery fire in 2004 that resulted in 15 deaths.

BP has responded with a wide-ranging internal review of operational safety worldwide, led by John Mogford, BP’s head of safety, but the US refineries face continuing investigation by federal officials. At the same time the US Department of Justice is investigating the Texas City fire, pipeline corrosion in Prudhoe Bay and alleged violations by BP oil and propane traders.

The second delay to Thunder Horse highlights the huge technical challenge facing oil companies operating offshore in deep water. It will cast further doubt on the oil industry’s ability to continue to meet demand for substantial growth in oil supply. Weighing 50,000 tons, the platform will produce oil and gas in water depths of 6,000ft.

Thunder Horse, about 150 miles southeast of New Orleans, was discovered in 1999 and has reserves of 1 billion barrels. BP is producing about 270,000 barrels a day from two dozen fields in the Gulf of Mexico.

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