Total SA (FP)’s Elgin platform leaked gas for a third day in the U.K. North Sea as neighboring rigs were evacuated to guard against the risk of an explosion.
Total dropped the most since 2008 after France’s largest oil producer said an emergency well may be needed to stem the leak, an operation that would take at least six months. Royal Dutch Shell (RDSA) Plc shut down the neighboring Shearwater field after a two-mile exclusion zone was declared.
“A best case is that the leak stops naturally within a number of days,” Sanford C. Bernstein & Co. said in a note to clients. “The worst case is that Total is forced to drill a relief 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. 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.
The platform was evacuated after a blow-out on March 25 during an operation to abandon a well, David Hainsworth, a health and safety manager for Total, said today by phone from Aberdeen. Nobody was injured in the incident.
A vapor cloud was seen rising above the rig today and about 23 tons of condensate, a light crude oil, has been released, Hainsworth said. The well causing the leak remained plugged and gas was coming from a smaller reservoir nearer the surface, he said, adding the leak may exhaust itself naturally.
“It’s unprecedented” in the North Sea, Jake Molloy, regional organizer for RMT union, said in a phone interview from Aberdeen. “High pressure gas flowing from a well with no means of preventing it. We are in the realm of the unknown, comparable to the Deepwater Horizon.”
BP Plc (BP/) drilled a relief well to permanently plug the Macondo well that leaked oil into the Gulf of Mexico for 87 days in 2010 after blowout 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.
Total fell 2.45 euros, or 6 percent, to close at 38.56 euros, the biggest one-day drop since December 2008.
It’s a “serious incident,” Tom Whittles, an Edinburgh- based spokesman for the Scottish government, said by phone. Still, it won’t have a “strong environmental impact on the area” as the condensate will probably evaporate, he said.
Condensate caused a sheen of 2 miles by 0.75 miles yesterday that has grown since then, Total spokesman Brian O’Neill said. There is an exclusion zone in place of 2 miles for shipping and 3 miles for aircraft.
The Elgin-Franklin 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 (ENI), BG Group Plc (BG/), EON AG (EOAN), Exxon Mobil Corp., Chevron Corp (CVX:US), Dyas AS and Summit Petroleum Ltd.
“The Forties crude-oil stream should be affected by the problems that Total currently has,” Olivier Jakob, managing director of Zug, Switzerland-based Petromatrix GmbH, said today in an e-mailed report.
Elgin produces 5.5 million cubic meters of gas a day and Franklin 7.8 million cubic meters, according to Total.
Condensate from the fields is exported through the Forties pipeline to Scotland’s Kinneil terminal. Gas is pumped via BP Plc’s Unity Riser into the Bacton Seal terminal in eastern England, operated by Shell, according to Total’s website.
Forties (EUCSFORT) is one of four North Sea oil grades that make up the Dated Brent (EUCRBRDT) benchmark, which is used to price crude from the Middle East, Africa and Russia. The other blends are Ekofisk, Brent and Oseberg.
Summer gas at the U.K.’s National Balancing Point, Britain’s gas-trading hub, rose 0.8 percent to 60 pence a therm, according to broker data compiled by Bloomberg. That’s the highest in a week and equal to $9.59 a million British thermal units. A therm is 100,000 Btu.
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.
A remotely-operated submarine will be used at the site, O’Neill said. No divers have yet been deployed and it’s not clear when the submarine will arrive at Elgin.
Shell carried out a “partial evacuation” of staff from its Shearwater oil and gas field as precaution, Ross Whittam, a Shell spokesman, said today by telephone from London. Shearwater is about 4 miles (6.4 kilometers) from Elgin. Output from the Scoter and Starling fields, which passes through the Shearwater platform, hasn’t been affected, Whittam said.
Drilling operations at the Noble Hans Duel drilling rig have also been suspended as a precaution, he said.
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