March 11, 2013 9:45 am

Total resumes Elgin-Franklin production

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The value of remaining North Sea oil reserves is central to the debate on Scottish independence - French energy giant Total's Elgin rig©AFP

The value of remaining North Sea oil reserves is central to the debate on Scottish independence

Total has finally resumed gas production at the Elgin-Franklin platform complex, nearly a year after a leak led to an emergency evacuation and a shutdown that has been blamed in part for Britain’s double-dip recession.

The shutdown of the complex, which accounted for an estimated 7 per cent of the UK’s gas output, together with some planned maintenance, led to a 14 per cent fall in total oil and gas output from UK waters last year that dented tax income to the Treasury by several billion pounds.

Patrice de Viviès, Total’s senior vice-president for exploration and production for northern Europe, said he expected output from the Elgin-Franklin gasfields east of Aberdeen to return quickly to half the level of its pre-accident output of about 140,000 barrels of oil equivalent a day.

Total operates the installation and has a 36 per cent stake in the asset alongside other backers that include Eni of Italy, BG Group and GDF Suez.

Extra investment in new satellite platforms and new wells planned by Total and its partners before the accident are expected to make production at Elgin, which had been slowly declining since it came on line in 2001, exceed levels achieved before the leak beyond 2015.

“By 2015 we will be back to the level [of output] anticipated before the leak. After that, we will be over what we planned before the leak,” he said.

But Mr de Viviès warned that problems in reactivating a number of wells across the field would leave production rates – and UK tax payments – at diminished levels over the next two years.

He added that work to develop production from a well on the nearby Glenelg field close to the complex could boost production back to 70 per cent of the pre-leak rate of 14,000 boe/d rate by sometime next year.

Elgin-Franklin is estimated to have already produced 700m barrels of oil equivalent with another 500m remaining to be extracted over the next two decades. “Elgin-Franklin is still an elephant,” said Mr de Viviès.

Total has blamed the leak on the failing of a casing in its G4 well, where a combination of bromide and lubricants used in the high temperature, high pressure environment caused corrosion and cracking and the eventual leak of gas and condensate at platform level.

The rapid evaporation of condensate avoided environmental disaster. But the risk of explosion posed by an extensive gas cloud prompted the evacuation of the complex and nearby platforms for several weeks.

The leak, at one point calculated to be 200,000 cubic feet of gas and condensate a day, was eventually stemmed by injecting heavy mud into the G4 well in May.

Total received the go-ahead to restart production at the complex from the UK’s Health and Safety Executive last week.

“Four wells we are sure pose no problems and we can restart them,” said Mr de Viviès. “For four or five other wells we need to see if there’s any way to do a workover, or we will plug and abandon them.”

The reactivation of the field, even on a modest scale, will provide a welcome fillip to the UK chancellor and offshore industry that was also hit earlier this month by a shutdown at the Cormorant Alpha platform north of Elgin that affected the transport and processing of oil and gas from nearby fields.

Total, one of the top-ranked North Sea operators, said investment in extending the Elgin-Franklin fields and other projects including developing the Laggan Tormore field west of Shetland would increase its overall level of production in UK waters in the coming years.

The eventual resumption of full production at Elgin by the state-backed French oil major should also help Total return to the ranks of being a top-five UK taxpayer as it invested further in British waters, according to Mr de Viviès. Before the leak, Total was paying close to £1bn in tax on profits to the UK exchequer, he said.

“Of our production in five years’ time, 40 per cent will come from new projects,” he added.

Among other projects planned by Total is the $4.2bn development of the Norwegian Martin Linge field that will be exported though UK waters to the St Fergus gas terminal in Scotland.

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