A natural gas leak has forced French oil giant Total to shut down its Elgin platform, one of two platforms which make up the Elgin-Franklin field in the UK’s North Sea.
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The leak, which was noticed following operations on the wellhead on the 25th March, sent shockwaves through an industry still scarred from the fiasco surrounding the human and environmental tragedy which occurred less than two years ago at BP‘s Deepwater Horizon platform in the Gulf of Mexico.
While it would be unfair to draw too many similarities between the disaster in the Gulf and the ongoing leak at Elgin at this stage, all eyes will be on Total and the lessons learned at Deepwater as the situation unfolds.
Leak at Elgin-Franklin gas field
The Elgin gas field is located in the North Sea approximately 240km east of Aberdeen
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By GlobalDataThe gas leak occurred on the Elgin gas field which is located in the UK North Sea approximately 240km east of Aberdeen. The incident happened during work to plug the well, which was to be abandoned as it no longer produces gas.
According to an early statement from Total, internal emergency procedures were launched immediately and Crisis Management Teams have been mobilised in Aberdeen and Paris.
Some 238 personnel were immediately evacuated onshore, and no injuries have been reported. Production on the Elgin, Franklin and West Franklin fields have been stopped completely.
More recent statements from Total have announced that the company has a "good idea" of the source of a gas leak. According to BBC reports, the company has described the situation as being "serious but stable" and said that it could take several days before a decision is made on how to tackle the leak.
The company has also confirmed the leak is coming from a rock formation above the main reservoir, at a depth of 4,000m, but that it was difficult to estimate the volume of gas leaking into the well. Early options to plug the leak could include drilling a relief well or sending a specialised team onto the platform to try and cap the leak.
At present surveillance aircraft have confirmed a sheen on the water around the platform. According to Total, this sheen is related to drilling muds and / or light condensate associated with the gas, representing a volume which on Sunday was estimated at about 30 cubic metres.
Preliminary assessments indicate no significant impact to the environment and dispersants are not considered necessary at this stage. Oil Spill Response Limited (OSRL) has been alerted and is currently evaluating the situation.
A full Total statement reads: "All necessary measures are being taken to respond appropriately to the situation and to minimize its impact. Investigations are ongoing to analyze the causes and to determine the remediation of the gas leak. Total is actively monitoring the situation with standby vessels in the area."
Elgin-Franklin – flare danger
Total has assured there is minimal risk of gas ignition at Elgin from the flare
Total has moved quickly to assure the public that there is minimal risk of explosion from the flare which ignited atop the oil rig as part of the platform’s safety system to burn-off excess hydrocarbons.
In a full statement, issued by the company, it said that during the incident (the flare) performed this task perfectly, allowing everyone to evacuate safely.
"The flare is still lit because when the platform is shut down and de-pressurised in an emergency, it cannot be fully purged as done in a controlled shutdown. This is perfectly normal," the statement said.
Quick response crucial – Oil & Gas UK
Responding to the ongoing gas leak at the Elgin PUQ installation, Oil & Gas UK’s health and safety director Robert Paterson said that: "Total reacted with commendable speed to ensure the safety of the people on the installation with a swift and successful evacuation. Oil & Gas UK remains in contact with Total and are monitoring the developing situation.
"While it would be wrong to speculate on the incident, Oil & Gas UK will play its role in ensuring any lessons from this are shared across the industry."
Economic costs not on the same scale as Deepwater Horizon
Fitch Ratings reports that this unfolding incident is not as serious as BP’s Deepwater Horizon accident in 2010.
According to Fitch: "Even in the event of the shutdown of the whole Elgin field, Fitch believes Total is likely to retain its ‘AA’ credit rating as it has the cash resources to more than cover any associated costs."
"In a "worse-than-base-case" scenario Total may have to shut down the Elgin field to stop the gas leak. This would imply the loss of a producing field that is worth, in net present value terms, EUR5.7bn according to third party valuations. Were the field to become permanently unusable it would cost Total EUR 2.6bn – its share in Elgin – and the company might have to compensate its partners for the remaining EUR3.1bn."
Environmental fallout
A surface gas leak such as at Elgin has lower environmental risk than an underwater oil leak
According to Fitch, the potential for environmental damage is far lower than in the Deepwater Horizon due to the leak being a surface gas leak rather than an underwater oil leak.
"These sorts of accidents are often difficult to resolve and unpredictable. Nonetheless, in our view the potential is low for this leak to escalate to a crisis on the scale of Deepwater Horizon. Total’s preliminary assessment suggests there has been no significant impact on the environment and the use of dispersants has not been considered," said a Fitch statement.
Greenpeace however disagreed. Energy campaigner Vicky Wyatt said the risk of an explosion is relatively small but if the direction of the wind were to change that could increase the risk of an explosion.
"The oil and gas industry here is clearly to blame, this is an industry that constantly reassures us that incidents like this won’t happen. What this incident shows us that leaks and spills do occur even in a supposedly safe environment like the North Sea," Wyatt argued.
"These companies just cannot be trusted to go to fragile environments like the arctic to drill for oil and explore for gas."
Frederic Hauge, President of the Norwegian environmental group Bellona, said: "We estimate the total greenhouse gas potential of the reservoir is roughly 0,56 Gigatonnes CO2 equivalent."
"This is based on recoverable resources of 15 billion cubic metres of gas at the West Franklin Field. The pressure in the well is 200-300 bars higher than Macondo. If no plugging is achieved, this leak is likely to continue for ten to 12 years. This is truly the well from hell," Hauge said.
Dr Richard Dixon, Director of WWF Scotland, said this incident has the potential to become a disaster if the escaping gas is ignited.
"It underlines the risks of the offshore oil industry and reinforces our concerns about the even riskier deepwater drilling which has just started at the North Uist well and plans for Arctic drilling," Dixon said.
"At this stage it is unclear what impact the dissolved gas and the sheen on the water will have on wildlife but the 200 tons of potent greenhouse gas escaping every day are a very unwelcome extra contribution to climate change. Total need to find a solution that works in days not months."
