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North Sea Rig Spews Gas as Total Weighs Options to Stem Leak

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Total Confident No Danger of Ignition From Flare on Elgin
Total SA's Elgin platform is seen in the North Sea. Source: Total E&P UK via Bloomberg

March 28 (Bloomberg) -- Total SA’s Elgin platform leaked natural gas for a fourth day as France’s largest oil producer weighed options for getting a damaged well under control.

Total shares fell and the cost of insuring the company’s debt jumped as it offered no update on plans to stop the leak. Total said yesterday it may need to drill an emergency well to cut off the gas flow under the sea bed, an operation that will probably take about six months. A U.K. trade union called for more workers to be evacuated from nearby North Sea platforms because of the risk of a blast.

“It seems there is no quick fix, except if the leak comes from a small pocket of gas that will deplete very fast,” Bertrand Hodee, an analyst at Kepler, said today in a report. “Remedial operations are likely to be complex given the gas surrounding the platform, which will make any human intervention on the platform or even from a nearby vessel very difficult.”

A flare that’s still burning on the rig was “faint and decreasing” yesterday and poses no danger because it’s 100 meters (328 feet) away from the leak on the well-head platform, Tony Peakin, a Total spokesman, said today by phone from Aberdeen, Scotland. The leak is at sea level, below the flare’s 180-meter tower, and the wind is blowing the cloud away from the platform, he said.

‘Drifting East’

The gas cloud was drifting east, away from the flare on the platform, and the situation was stable, Total said today in an e-mailed statement. The cause of the leak is still being investigated and the sheen on the surface of the sea appears to be unchanged, spanning about 3 miles, the company said.

Winds are forecast to blow from the west until early next week, the U.K.’s Met Office said today.

The platform was evacuated after a blow-out on March 25 during an operation to abandon a well. Royal Dutch Shell Plc shut the neighboring Shearwater field yesterday to guard against the risk of explosion. The Elgin-Franklin fields, about 140 miles (225 kilometers) east of Aberdeen in Scotland, supply about 15 percent of the Forties blend, one of the crudes used to price the Brent benchmark for more than half the world’s oil.

Wild Well

Total has flown in Wild Well Control Inc. to help battle the leak and stopped work at a neighboring field to free up a rig to drill a relief well. A remote controlled submarine arrived at Elgin at 11 p.m. yesterday to begin an assessment of the rig, Peakin said. The company is still deciding whether it needs to deploy the machine.

Total fell as much as 3.4 percent to 37.26 euros in Paris today after dropping the most since December 2008 yesterday. The shares closed at 38.02 euros, the lowest this year.

The cost of insuring debt of Total jumped 19 basis points to 98.5 basis points at 5 p.m. local time, according to CMA prices for credit-default swaps. That’s up from 60 basis points on March 26.

The Unite union wants Shell to remove workers carrying out maintenance at the Shearwater field, four mile from Elgin, Willie Wallace, a regional officer in Aberdeen, said by telephone today. Total should reject a plan to put a small team of people on the unmanned Franklin platform , he said.

Remained Plugged

The well causing the leak remained plugged and gas is coming from a smaller reservoir nearer the surface, David Hainsworth, a health, safety and environment manager at Total, said yesterday, adding the leak may exhaust itself naturally.

BP Plc took five months to drill a relief well to permanently plug the blowout that leaked oil into the Gulf of Mexico for 87 days in 2010 after an explosion on the Deepwater Horizon rig killed 11 workers. The worst accident in U.K. waters was on the Piper Alpha platform in 1988 that killed 167.

Elgin-Franklin is the deepest producing field in the North Sea and the largest so-called high pressure, high temperature development in the world, according to Total.

The fields produced a daily average of 61,386 barrels of condensate in November, according to the most recent government data. That’s about 15 percent of all Forties shipments that month, loading data show. Shareholders in both fields include Eni SpA, BG Group Plc, EON AG, Exxon Mobil Corp., Chevron Corp, Dyas AS and Summit Petroleum Ltd.

Elgin produces 5.5 million cubic meters of gas a day and Franklin 7.8 million cubic meters, according to Total.

Helicopter Ride

The 33,500-ton Elgin Franklin platform, which rises above 92 meters of water and is an hour’s helicopter ride from the mainland, is where oil and natural gas from the Elgin, Franklin, Glenelg and West Franklin fields is collected, processed and exported through pipelines.

The Elgin deposit, started in 2001, has a temperature of about 200 degrees Celsius (392 degrees Fahrenheit), compared with about 90 degrees at other North Sea deposits. Pressure is almost four times that at similar fields, according to Total.

Shell carried out a “partial evacuation” of staff from its Shearwater oil and gas field as precaution and halted it for maintenance, Ross Whittam, a Shell spokesman, said yesterday by telephone from London. Shell has no plans to remove the remaining workers from the rig, he said today. Shearwater is about 4 miles from Elgin. Output from the Scoter and Starling fields, which passes through the Shearwater platform, has also stopped.

Drilling operations at the Noble Hans Duel drilling rig have also been suspended as a precaution, he said.

To contact the reporter on this story: Ben Farey in London at bfarey@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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