Ropey conditions: Broken rope costs shareholders millions

What could turn out to be the world’s most expensive rope broke last week as a ship owned by Hurricane Energy braved rough Atlantic conditions.

Shares fell 5.7 per cent today, wiping over £55m off Hurricane’s market value as the company announced what it says is a minor setback off the Shetland Islands.

A Hurricane ship, the Aoka Mizu, was trying to connect to a series of fuel lines under the ocean, when a rope which was being used to pull up the lines “failed” on Saturday, the company said.

It is the company's second setback in two months after another rope snagged in January.

However Hurricane insists it is on track to take the first oil from the 500m barrel Lancaster oil field in the first half of the year.

“There is no change to the schedule,” a spokesperson told City A.M.

Hurricane did not say exactly how the rope had failed, but it is believed to be beyond repair as the Aoka Mizu has returned to port to wait for a new rope.

So-called pull-in ropes are used to pull a massive buoy into the hull of the ship. Oil-carrying flowlines, which are connected to the buoy, are then installed in the ship and and oil is pumped onto a second vessel.

The ship has to wait until conditions in the notoriously rough sea are calmer before attempting the process again.

However, analysts say the setback is just bad luck.

“The continued issues with the morning buoy are unfortunate, but not altogether unheard of. Given that this equipment if not strictly 'standard' isn’t new technology, we believe that it is has been a run or bad luck, opposed to anything more sinister,” researchers at SP Angel said.

“Consequently, any weakness on the back of this news is to be taken advantage by investors who back the longer-term valuation story.”

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