Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.

Less Ads, More Data, More Tools Register for FREE

Pin to quick picksRDSA.L Share News (RDSA)

  • There is currently no data for RDSA

Watchlists are a member only feature

Login to your account

Alerts are a premium feature

Login to your account

INTERVIEW-A year after Elgin shutdown, Total restarts production

Mon, 11th Mar 2013 07:32

* Total restarted output at Elgin field on March 9

* Elgin to reach pre-leak output capacity in 2015

* Total to "kill" at least 10 wells at Elgin on safety norms

* Total needs HSE green light to give full accident reasons

* Leak had shaved off 0.2 pct points of UK's 2012 GDP

By Muriel Boselli and Michel Rose

PARIS, March 11 (Reuters) - Total restartedproduction on Saturday at its huge Elgin gas field in the NorthSea, almost a year after a major gas leak which cost the companymillions of euros in lost output and even impacted UK economicgrowth.

Total will not release the full details of what went wrongwith the G4 well until it gets the go-ahead from Britain'sHealth and Safety Executive (HSE), which gave its clearance lastweek for the French group to restart the field.

Total's G4 well in the Elgin field, which spewed gas forover seven weeks after the leak, will return to production of60,000 barrels of oil equivalent per day (boepd) by the end ofthe month, half its pre-leak level, two Total executives said.

"We can expect that after 11 months of outage, the restartwill take place in a series of restarts and stoppages,"Yves-Louis Darricarrere, Total's head of exploration andproduction, told Reuters in a telephone interview.

The field, located 240 km off the eastern coast of Scotlandand operated by Total which has a 46.2 percent stake, wouldreturn to its pre-accident production level in 2015 and wouldreach between 130,000 and 140,000 boepd in 2016, a higher levelthan what was forecast before the accident, the executives said.

"The accident has not diminished the reserves, so what wedidn't produce during the time interval (2012-2015) will meanmore production for 2016, 2017 and 2018," Darricarrere added.

Elgin and the nearby Franklin field, which startedproduction in 2001, accounted for nearly 3 percent of Britain'soutput and the shutdown registered on Britain's ailing economy,as falling oil and gas production knocked 0.2 percentage pointsoff gross domestic product last year.

Total, which is one of Britain's biggest investors, alsosaid more stringent safety rules at the field meant it wouldkill a minimum of 10 wells, out of a total of 19, over athree-year period, by injecting some 800 metres of cement perwell.

The production increase will be achieved by the developmentof two big projects: phase two of West Franklin and a revamp ofElgin, expected to be finalised this summer, Darricarrere said.

"The Elgin Franklin field has produced 700 million barrelsof oil equivalent and there is still 500 million to produce, thesize of an elephant (industry jargon to describe a field of morethat 500 million boe)," the executive said.

"HUMILITY LESSON"

News of the gas leak in March last year revived memories ofBP's Deepwater Horizon disaster and had an initiallysevere impact on Total shares, which fell almost a fifth in thetwo months after the initial leak.

The stock has since recovered to trade just 2 euros belowthe 41 euros seen before the accident, but is still valued atonly 7.3 times 12-month forward earnings, a 20 percent discountto its peers globally and a 10 percent discount to BP and Shell.

Darricarrere said the cost of the closure for Total hadreached 1 million pounds ($1.5 million) a day in lost revenue -suggesting a total loss in revenue between March 25, 2012, andMarch 11, 2013 of $526 million.

The company said almost all of its repair bill had beenreimbursed by insurers.

Total insisted the accident, which forced the evacuation of238 workers, was unique to the G4 well and was a first in thehistory of the oil and gas industry, but declined to disclosethe details of what made it such a special case.

Patrice de Vivies, chairman of Total Holdings UK, cited pipecorrosion due to a chemical reaction between bromide in thedrilling fluid and grease in the pipework in a highlypressurised and heated environment.

But de Vivies acknowledged the equipment was commonly usedin the sector and those circumstances alone were not sufficientto fully explain the accident.

"I can tell you that I have the duty to communicate what wehave found when we'll have the green light of the HSE to ensurethis type of accident does not happen again," de Vivies said."For the moment the information in not public."

He added such an accident could not occur in the other ElginFranklin wells, where bromide was not used in the same way.

De Vivies said the accident had been a jolt for thefifth-largest western oil group, which describes itself as adeepwater pioneer and had used the Elgin Franklin field, one ofBritain's largest, as a display for its technological prowess.

"This is of course a humility lesson," De Vivies said. "Wewere using the best technology there and the best teamsworldwide so it was a shock that it happened to us." ($1 = 0.6645 British pounds) (Editing by David Holmes)

More News
16 Dec 2021 22:13

UPDATE 2-Royal Dutch Shell confirms delay in sale of Texas refinery to Mexico's Pemex

(Adds approval expected by Jan. 13)By Stefanie Eschenbacher and Erwin SebaMEXICO CITY/HOUSTON, Dec 16 (Reuters) - Royal Dutch Shell on Thursday confirmed a Reuters report that the sale of its controlling interest in a Texas refinery to Mexican stat...

Read more
16 Dec 2021 14:42

Latin American oil auctions kick off after two-year lull

* 11 firms registered to bid in Brazil's auction on Friday* Competition expected to be fiercest since 2018* Seven Latin American nations to hold auctions in 2022-2023By Marianna Parraga and Sabrina ValleHOUSTON, Dec 16 (Reuters) - Latin America's oil...

Read more
15 Dec 2021 12:16

Five companies seek to develop CO2 storage off Norway

OSLO, Dec 15 (Reuters) - Five companies have applied to build carbon dioxide (CO2) storage on the Norwegian continental shelf, the country's oil and energy ministry said on Wednesday.The ministry proposed in September two offshore areas, one in th...

Read more
15 Dec 2021 10:10

UPDATE 2-FTSE dips as inflation surges to 10-year high

(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window)* IAG down on plans to cancel Air Europa acquisition* Rentokil falls for second day on M&A plans* Inflation jumped to 5.1% in Nov vs. 4.2% in...

Read more
15 Dec 2021 09:33

LONDON BROKER RATINGS: BofA starts Pod Point at Buy; Barclays cuts DCC

LONDON BROKER RATINGS: BofA starts Pod Point at Buy; Barclays cuts DCC

Read more
14 Dec 2021 09:40

LONDON BROKER RATINGS: JPMorgan raises Experian, cuts BAE Systems

LONDON BROKER RATINGS: JPMorgan raises Experian, cuts BAE Systems

Read more
13 Dec 2021 16:10

UK dividends calendar - next 7 days

UK dividends calendar - next 7 days

Read more
13 Dec 2021 11:48

Brazil's oil regulator approves Mero oilfield production agreement

SAO PAULO, Dec 13 (Reuters) - Brazilian state-run oil company Petrobras said on Monday that the country's oil regulator ANP has approved a production agreement for the Mero oilfield, deciding on which stake of its oil and gas output will be hold ...

Read more
13 Dec 2021 10:16

UPDATE 2-Energy, bank stocks drag London's FTSE 100; Omicron fears weigh

(For a Reuters live blog on U.S., UK and European stock markets, click LIVE/ or type LIVE/ in a news window)* Purplebricks plunges after delaying results* SThree drops as CEO steps down* FTSE 100 down 0.8%, FTSE 250 off 1.2% (Updates to close)By Ba...

Read more
13 Dec 2021 07:22

Qatar Energy acquires 17% stake in Shell-operated concessions in Egypt

DUBAI, Dec 13 (Reuters) - Qatar Energy will acquire a 17% stake in two Shell-operated concessions (Block 3 and Block 4) in Egypt's Red Sea region, Shell Egypt said on Monday.Shell will remain the main operator of the concessions, Shell Egypt's st...

Read more
12 Dec 2021 14:00

Activist group targets Exxon with shareholder climate resolution

* Follow This targets Exxon for first time* Dutch group also targets other energy companiesBy Ron Bousso and Sabrina ValleLONDON, Dec 12 (Reuters) - Climate activist group Follow This targeted Exxon Mobil Corp with a shareholder resolution urging i...

Read more
10 Dec 2021 23:26

UPDATE 1-Shell restarting Louisiana refinery crude unit after repairs from Hurricane Ida -sources

(Adds no reply from company)HOUSTON, Dec 10 (Reuters) - Royal Dutch Shell Plc was restarting on Friday the crude distillation unit (CDU) at its 230,811 barrel-per-day (bpd) Norco, Louisiana, refinery after completing repairs from Hurricane Ida, sa...

Read more
10 Dec 2021 20:44

Shell restarting Louisiana refinery crude unit after repairs from Hurricane Ida -sources

HOUSTON, Dec 10 (Reuters) - Royal Dutch Shell Plc was restarting on Friday the crude distillation unit (CDU) at its 230,811 barrel-per-day (bpd) Norco, Louisiana, refinery after completing repairs from Hurricane Ida, said sources familiar with pl...

Read more
10 Dec 2021 16:57

Can we still be friends? Shell sends Dutch PM parting note

By Toby SterlingAMSTERDAM, Dec 10 (Reuters) - On the day that shareholders of Royal Dutch Shell PLC voted to move the company's headquarters to London https://www.reuters.com/markets/europe/royal-dutch-shell-plc-shareholders-set-approve-move-london...

Read more
10 Dec 2021 15:29

Belarus oil firm cancels 2022 exports to Germany after EU sanctions - traders

MOSCOW, Dec 10 (Reuters) - Belarusian oil company Belorusneft has cancelled its 2022 export plans to Germany via the Druzhba pipeline following new European Union sanctions on the company, three traders familiar with the matter said on Friday.On ...

Read more

Login to your account

Don't have an account? Click here to register.

Quickpicks are a member only feature

Login to your account

Don't have an account? Click here to register.