Total Considers Relief Well To End Elgin Gas Leak
03/27/2012| 10:45am US/Eastern
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-- Gas leak at platform level, not sea floor
-- Leaking well has been shut down for about one year
-- Total says incident can't be compared to BP's accident in Gulf of Mexico
(Adds detail, background.)
By Geraldine Amiel
Of
Total SA (TOT) is studying all options, including drilling a relief well, to end an ongoing gas leak at its Elgin platform in the North Sea, a spokesman for the group said Tuesday, but he emphasized that comparisons couldn't be made with the disastrous 2010 Gulf of Mexico oil spill.
Despite the reassurances, Total's shares were down substantially in Tuesday afternoon trade, amid considerable market uncertainty regarding the Elgin incident.
By midday Tuesday, the leak was still ongoing and although the exact cause was still unknown, Total believes "it comes from a zone of gas-bearing rock above the main reservoir in the Elgin field," spokesman Andrew Hogg said, noting the group hadn't been able to assess how much gas had been leaked into the air.
"The gas leak is at the platform level, not on the sea floor" as was the case in the U.S. Gulf, Hogg said, insisting that earlier reports of "the sea boiling" were completely wrong.
In April 2010, an explosion on the drilling rig at BP PLC's (BP) Deepwater Horizon exploration platform in the northern part of the Gulf of Mexico, off the coast of Louisiana, killed 11 workers and triggered a major oil spill which destroyed major parts of the local fauna and putting a halt to local fisheries businesses.
Total has shut down all production from Elgin as well as the neighboring Franklin field, which together represent around 9 million standard cubic feet of gas a day. The fields produced 130,000 barrels of oil equivalent a day on average in 2011. The neighboring West Franklin field isn't in production, the spokesman said.
It could take "a couple of weeks" under a best-case scenario to end the leak, he said, as international experts from within and outside the group have been flown in to address the issue. Several options are being studied, including drilling a relief well, Hogg said.
The leak comes from a well, known as G4, that was drilled in 1997 and has now been shut for about one year, he said. As for the sheen on the sea that has been spotted in the vicinity of the platform, its size hasn't grown since Monday, and it is six nautical miles long, representing 24 metric tons of condensate, the group estimated, he said.
Total evacuated all its employees and powered down the platform Sunday. No employee will return until a full risk assessment is conducted by the group and experts, Hogg said.
The techniques which will be used to end the leak will be also chosen according to the potential risks run by the platform's employees, Hogg said.
The U.K. coastguard has maintained exclusion zones around the area and Shell also evacuated some personnel from its nearby Shearwater platform and Noble Hans Deul drilling rig and suspended drilling operations as a precautionary measure.
"It has been decided to reduce numbers to a more manageable level until the full situation surrounding the Elgin leak has been established," a Shell spokesman said.
Shell's decision is that of a "responsible, cautious" operator, Hogg commented.
Total shares were recently trading down 6.3%, at EUR38.42, while the CAC-40 benchmark index was down 0.9%.
-By Geraldine Amiel, Dow Jones Newswires; +33 1 40171767; geraldine.amiel@dowjones.com
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