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Exploration & Production: The Oil & Gas Review - 2003


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ARTICLES

Implications of the Prestige Tanker Disaster
Gavin Knight

Originally printed in:
Exploration & Production: The Oil & Gas Review - 2003

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Introduction

In November 2002, the oil tanker Prestige split in half, spilling 70,000 tonnes of oil onto the Spanish coast. The disaster highlighted the risks involved with ageing single hull vessels transporting crude oil. An environmental disaster of this scale causes severe damage to a company’s reputation and can incur costs that run into billions of dollars. It also had implications at a policy level when the European Union sought to impose a long-term ban on single hull vessels. Spain and Portugal have been taking a tougher line with ageing single hull ships, but it remains to be seen if this measure is enforceable. This article looks at some of these high-profile oil disasters and considers how the effects might have been averted.

Case One: The Prestige – November 2002

The Prestige tanker ran into trouble in a storm off the coast of Galicia. On 13 November, the oil tanker was trailing a growing slick from its badly damaged hull. Salvagers attempted to tow it to safety but both the Spanish and Portuguese authorities refused to allow the ship to dock, anticipating a slick on their waters. It seems likely now that if the tanker had been towed through calm waters to a port, the fuel could have been transferred to another vessel. The decision by the authorities was therefore disastrous.

Such was the intensity of opposition to the ship’s request for refuge that both Spain and Portugal sent out warships. As a result, the tanker remained in some of the roughest water in the region for 90 hours until it finally cracked in half on 19 November. The split tanker sank in 12,000 feet of water 150 miles out to sea and released 70,000 tonnes of oil. The oil then washed up on 400 miles of beaches in the Spanish fishing villages of Galicia.

All sides were keen to assign blame. Journalists were quick to label the disaster “worse thanExxon Valdez”, and people began to wonder what the financial cost of the disaster would be. Exxon was ordered to pay US$5 billion to local fishermen and groups in 1994 so the question was whether the Prestige disaster would result in a similar bill. Faced with potentially huge clean-up liabilities, blame was apportioned to the following parties:

  • Latvia – where the ship was loaded with its fuel;
  • Britain – the ship was apparently heading for Gibraltar and the British authorities refused it permission to land;
  • Spain and Portugal – for not allowing the ship to dock and for sending out warships; and
  • Crown Resources – the Swiss-based Russian trading company that owned the tanker.

It is useful to compare both incidents and draw lessons in an attempt to mitigate future disasters.

The ‘Coast of Death’

The significance of bad weather can be seen in both the case of the Prestige and of the Exxon Valdez. When trouble first hit the vessels, deteriorating weather significantly increased the impact of the initial slick. The area that claimed the Prestige is known as the ‘Coast of Death’ due to the number of shipwrecks in its waters. Frequent wintertime North Atlantic lows sent swell in so strong that it cracked the Prestige in half, just off Cape Finisterre, on Spain’s Costa da Morte, or Coast of Death. Once out in the Atlantic, on 23 November, high winds and more swell sent the ship to the bottom of the ocean, leaking over 1.3 million gallons of oil. Satellite photos show the slick created by the spill stretching out almost 200 miles – and still spreading. Some experts think it could extend all the way into Portugal, exacerbated by the rough seas.

In January 2003, the slick hit French beaches on a 100km stretch of the coastline north of Arcachon. High winds and rain have caused the slick to mix with sand and make clean-up attempts difficult. Approximately 100 large slicks of 10–20 square metres are heading for France at a rate of 40km a day. Bad weather has also delayed repair work.

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Category:
Environment

 



Gavin Knight is a senior research analyst for World Markets Research Centreâ??s (WMRCâ??s) World Markets Energy Practice, the ground-breaking, daily-updated service encompassing all aspects of energy, from hydrocarbons to electricity generation. He trained at the Institute of Petroleum in Investment Profitability Studies in the Petroleum Industry and Financial Performance Management in the Oil Business. He has written for a number of energy publications including FT Energy, Power Economics, World Independent Power and for the national UK press. Mr Knight has an MA from Cambridge University


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