Bloomberg News

Total’s Elgin Platform to ‘Hopefully’ Restart Before End of 2012

August 31, 2012

Total SA (FP) Chief Executive Officer Christophe de Margerie said production from the Elgin field in the U.K. North Sea, shut by a gas leak, could restart by the end of the year.

“Hopefully before the year-end, it’s very difficult to say exactly when,” he said today in an interview at a conference outside Paris. “This gas is needed, especially during the winter time. We will do our best.”

Total is struggling to raise output after the North Sea field was evacuated and shut down March 25 following a natural gas leak. A 2012 restart of Elgin will be “challenging,” Chief Financial Officer Patrick de la Chevardiere said last month.

The shutdown at Elgin rattled investor confidence in Total’s production growth targets and may cost as much as $400 million in lost output this year. The platform, about 240 kilometers (149 miles) east of Aberdeen in Scotland, and the nearby Franklin operation, provide about 2 percent of the company’s annual output.

“We have to make sure everything is in place, we cannot take any risks,” de Margerie said. “It’s safety first, especially after what happened.”

Total hasn’t yet made a decision on whether to sell its French natural gas network TIGF, he said. “There is no plan, it’s a study. No decision has been taken,” he said.

Asset Sales

Total began a series of asset sales and purchases in 2010, seeking to raise energy production. The French oil company in 2011 agreed to sell its 6.4 percent stake in the Norwegian Gassled pipeline network to Silex Gas Norway AS, owned by German insurer Allianz SE.

TIGF’s 5,000 kilometers of pipeline in southwestern France transport about 12 percent of the country’s natural gas and had 2010 revenue of 370 million euros, according to its website.

The sale of the network may fetch about 2.5 billion euros, two people familiar with the process said last month.

The French company is working with Goldman Sachs Group Inc. and Lazard Ltd. to seek buyers for the transmission network, said the people, who asked not to be identified because talks are private. Potential bidders include companies such as Enagas SA, the operator of Spain’s natural-gas grid, infrastructure investors including Global Infrastructure Partners Ltd., and also pension funds, one of the people said.

To contact the reporters on this story: Tara Patel in Paris at tpatel2@bloomberg.net; Caroline Connan in London at cconnan@bloomberg.net

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


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