Wednesday, May 16, 2012

Total Finally Stopped Gas Leak

Story first appeared in The Wall Street Journal.
French oil major Total SA  said Wednesday it has stopped the natural-gas leak at its North Sea Elgin platform by pumping heavy mud into the leaking well there.  They stated that their absolute priority was to stop the gas leak safely and as quickly as possible, and will learn from the accident. However, the leak has been going on for approximately 3 weeks.

News of the swift resolution—the operation began Tuesday—is a boost for Total, which has suffered many blows to its production in this year. Attacks on its pipeline in Yemen and instability in Syria have added to the Elgin incident, which has cost the company some $2 million a day and prompted questions about the safety of offshore drilling.

Total didn't say when output would resume from Elgin, which has been out of action since the leak was discovered March 25.

A Cheuvreux analyst said that once Total regains control of the well, it will have to properly kill it—an operation likely to last an additional two months.

Total will only be allowed to restart production once U.K. authorities give their green light, a process that cannot be completed until the causes of the incident are known. The ramp-up will only be gradual, and forecasts no production from the Elgin-Franklin field complex in the second and the third quarter and only half-capacity in the fourth quarter.

The intervention operation began Tuesday at 8:20 a.m. GMT and the leak stopped 12 hours later, the French company said.

The leak was detected during operations to seal the G4 well that had encountered several incidents over the past year. It forced the group to power down the platform and remove its 238 employees, and raised fears there could be a massive explosion and pollution comparable to that of the Macondo oil spill in the Gulf of Mexico that cost BP PLC several billion dollars.

The Elgin leak is expected to result in the loss of some 6% of U.K. summer gas supply, according to the U.K.'s National Grid.

Total is also preparing to drill two relief wells in case the operation to definitively seal the leaking well wasn't successful.

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