April 19, 2024

Total Reveals Cause of North Sea Natural Gas Leak

LONDON — Total, the French oil company, has revealed its version of the causes of the major North Sea natural gas leak, which has shut down production on the company’s flagship Elgin-Franklin North Sea field for almost a year.

At the time of the leak, in March 2012, gas from the Elgin-Franklin complex accounted for about 7 percent of British production, and the British Treasury has blamed the outage at the field for lowering tax receipts and economic growth.

Patrice de Vivies, the company’s senior vice president for exploration and production for northern Europe, told reporters on Thursday that the leak last March had been due to corrosion stress cracking caused by a reaction between grease on the threads of the well casing and bromine used in the fluid inside the well.

In addition, a gas layer called Hod, which was about 1,000 meters or about 3,300 feet above the Fulmar gas layer being tapped by the well, unexpectedly began producing oil and gas, possibly because it was affected by the production of the lower layer. He called this set of circumstances “unique.”

“It is impossible to forecast this type of incident,” Mr. de Vivies said.

The comments were a reminder of how dangerous oil and gas production can be even when a company operates in a way that by all appearances should be safe. The well was originally installed in 2000, he said.

Mr. de Vivies said that he did not expect sanctions from the British authorities. A spokesman for the British Health and Safety Executive said that the matter remained under investigation.

Total was forced to evacuate 238 workers from the Elgin platform, about 240 kilometers or about 150 miles from Aberdeen in Scotland, when the leak was discovered. The platform serves a complex of fields. There was a danger that the gas could catch fire, leading to a catastrophic incident. The well, known as G4, was plugged about two months later. The incident caused no injuries.

At the time of the shutdown, Elgin-Franklin was producing the equivalent of 140,000 barrels of oil per day in gas and liquids, making it a very large field.

Mr. de Vivies said that the company had submitted plans late last year for restarting the field and it expected these to be accepted by the British authorities within days. The company then plans to bring the field back online gradually, starting with four wells compared to 14 at the time of the incident. He said that he expected production by year-end to be about 70,000 barrels per day, or half of what it was at the time of the leak. By 2016 , the company’s drilling program should take production levels above 140,000 barrels per day, he said.

Mr. de Vivies said that Total had learned lessons from the leak in a field in which the gas is under high pressure and high temperature, and that the company would be more conservative about how it operated in the future. He also said that Total would share its findings with other companies to avoid a repeat of this type of incident.

Total is expanding its British production at a time when other oil majors have been selling assets to smaller companies. Christophe de Margerie, Total’s chief executive, has said that Total is considering becoming involved in shale gas development in Britain, “which we think has potential,” he said.

Article source: http://www.nytimes.com/2013/02/16/business/global/total-reveals-cause-of-north-sea-natural-gas-leak.html?partner=rss&emc=rss

DealBook: FrontPoint’s Eisman to Depart Hedge Fund Firm

Steve Eisman — the colorful hedge fund manager who made a fortune betting against the subprime mortgage market — is leaving FrontPoint Partners, according to people familiar with the matter.

His departure is another blow for the hedge fund firm, which came under pressure late last year amid an insider trading scandal. The controversy prompted investors to pull billions of dollars from FrontPoint, a loss of capital that culminated in the firm deciding to shutter most of its funds last month.

Rumors of Mr. Eisman’s pending departure began circulating earlier this year. A source close to Mr. Eisman said he was disappointed that his fund suffered heavy redemption requests as a result of the scandal, despite the fact his funds were completely unrelated. Two of Mr. Eisman’s three funds at FrontPoint had suffered nearly a half billion dollars in redemption requests at the time.

While the firm has never been accused of wrongdoing, a former FrontPoint portfolio manager, Joseph Skowron, was charged by federal authorities in April. Mr. Skowron is accused of paying for inside tips about a clinical drug trial, information that saved his fund $30 million in losses.

AR Magazine previously reported news of Mr. Eisman’s departure.

Mr. Eisman is the most high-profile manager at FrontPoint, thanks in large part to a prominent role he played in “The Big Short,” Michael Lewis’ bestselling book about the financial crisis.

It’s unclear what Mr. Eisman will do next. But a source close to the money manager says he eventually plans to launch a new fund.

FrontPoint has been devastated by the insider trading mess. Last month, the firm said it planned to shutter its flagship fund, which accounted for the bulk of the firms assets. It will retain four strategies: the Quant Macro Fund, Strategic Credit Fund, Rockbay Fund and a direct lending fund.

Article source: http://feeds.nytimes.com/click.phdo?i=1b63cbe676012cdd35153fe98e21728c