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Total stops North Sea gas leak

Elgin Wellhead Platform in North Sea

Powered by Guardian.co.ukThis article titled “Total stops North Sea gas leak” was written by Terry Macalister, for guardian.co.uk on Wednesday 16th May 2012 14.22 UTC

The near two month crisis around a gas well on the Elgin field in the North Sea appeared to have been averted on Wednesday with French operator, Total, saying it had succeeded in plugging the leak.

Shares in the company rose more than 2% on the announcement that no more methane was being released into the environment and the company can soon put a halt to its relief operations which have been costing it $3m a day.

“A major turning point has been achieved,” said Yves-Louis Darricarrere, Total’s head of exploration and production, but the company said it was too soon to say when gas and condensate production could resume.

The Elgin platform used to pump about 3% of Britain’s total gas output from nearly four miles below the seabed, and the incident comes on top of production problems elsewhere.

Safety issues in Yemen and a gas leak in Nigeria have been putting a brake on the company’s target of increasing its global output by 2.5% through to 2015.

The oil world is very nervous of offshore incidents after BP’s Macondo oil well spill in the Gulf of Mexico in the spring of 2010. That, very different from the Total gas leak, is expected to cost the company around $30bn in compensation and other claims.

Christophe de Margerie, Total’s chief executive, has previously said the Elgin leak could cost the company slightly more than $300m in lost production in a worst case scenario where production did not restart before the end of the year.

There was relief in the City among investors. “Obviously good news for the group. Final costs are now awaited, but no bad surprises expected,” said analysts at Alphavalue in a research note. Shares in Total had lost 16% of their value since the gas leak began in late March.

guardian.co.uk © Guardian News & Media Limited 2010

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