UPDATE 1-Talisman says Yme oil platform could collapse in storm

* July 26 letter to safety body warned of instability

* Talisman says problems are related to grouting issue

* Yme now well over a year behind schedule

(Adds Talisman comment, background)

By Vegard Botterli

OSLO, Oct 4 (Reuters) - The evacuated Yme oil platform is at risk of collapsing into the Norwegian North Sea this winter, operator Talisman Energy warned safety authorities in a July letter seen by Reuters on Thursday.

Repairs are needed to avert such a risk, Talisman said in the letter to the Norway's Petroleum Safety Authority dated July 26, written several weeks after the platform was evacuated in the latest of a string of problems that have plagued Yme.

The project is well over a year behind schedule, and Talisman has removed any future production from its corporate forecasts until start-up looks more secure. John Manzoni, who was replaced as Talisman's CEO last month, had complained frequently about what he called poor workmanship by the platform's Dutch contractor, SBM Offshore .

"A structural collapse can arise through considerable shifts and deformations ... The unit can then, in the worst case, drop down vertically, penetrate the tank and/or tip over on either side with a danger of damaging nearby pipelines/umbilicals," Talisman wrote.

"Without compensating measures there is great probability of cracks forming and a loss of carrying ability ... by the platform's legs before or during the coming winter season."

In early July, Talisman said it had removed 140 workers from the platform as a precaution, citing the failure of SBM to provide safety documentation for the jack-up portion. It said the workers had not been in imminent danger.

A Talisman spokeswoman said on Thursday that SBM is still working on fixing the problems the July letter had referred to: faulty grouting on the platform's foundation legs.

"Until the grouting issues are completed and we receive sort of a technical study from SBM outlining that the platform is safe again, there will be no workers allowed back onto the platform," Talisman's Phoebe Buckland said.

Repairs will be made using remotely-operated vehicles, she said.

SBM Offshore could not be reached for comment on Thursday.

The oilfield where the platform sits has not been operated since 2001, so the risk of a spill is limited to 80 cubic metres of diesel, 200 litres of the toxic bleach hypochlorite, and small amounts of other chemicals, Talisman said.

The oil wells are not at risk, it said.

Buckland said Talisman will comply with an order from the Norwegian Petroleum Directorate (NPD) to deliver by Dec. 31 a new development plan for Yme that addresses its safety issues.

An NPD spokeswoman said it was up to Talisman to propose fixes, which the company in its letter said would be outlined by November.

It was also considering transporting the platform back onshore but this was not possible before 2013, after the winter storm season.

Yme was constructed in Abu Dhabi and refitted in Norway for use in the North Sea. However, safety authorities compiled a list of thousands of faults and refused to permit it to operate until repairs were made.

The Yme field was discovered in 1987 and has reserves of 12 million cubic metres of recoverable oil left. It would be the first field in Norway to be redeveloped after Statoil operated it from between 1996 to 2001.

Talisman shares were unchanged at C$13.16 on the Toronto Stock Exchange. Earlier this year the company wrote off $248 million of its $900 million investment in Yme, which is designed to produce 40,000 barrels a day.

In addition to its 60 percent stake in the installation, Polish refiner Lotos has 20 percent, Norske ADEC holds 10 percent and Wintershall, an arm of BASF , has 10 percent.

($1=$0.98 Canadian)

(Additional reporting by Jeffrey Jones in Calgary and Victoria Klesty, Balazs Koranyi and Terje Solsvik in Oslo; editing by Jason Neely; and Peter Galloway)

((victoria.klesty@thomsonreuters.com)(+47 2293 6979)(Reuters Messaging: victoria.klesty.thomsonreuters.com@reuters.net))

Keywords: NORWAY YME/