Oil prices see-sawed on Monday…
An abrupt change in mining…
On the 25th of March, during the abandonment of a well, there was a blow out at Total SA’s Eligin platform 150 miles off the coast of Aberdeen, Scotland. On Monday over 230 workers were successfully evacuated from the well due to risk of explosions, following the discovery of an oil condensate which started to leak into the North Sea and gas clouds which were being released into the atmosphere.
A spokesman for Total stated that, “it's the biggest problem we've had for ten years in the North Sea. It's not going to be solved straightforwardly; it will take at least a few days.” They have confirmed a six mile long sheen across the water and a gas cloud which has surrounded the rig. They are focussing all efforts on identifying the source of the leak, which they believe to be above the water, on the actual rig itself.
Sanford C. Bernstein & Co., the investment-management firm, has sent a note to its clients to warn that “a best case is that the leak stops naturally within a number of days. The worst case is that Total is forced to drill a relief well,” which would prove costly and time consuming.
As a precautionary measure against the gas leak the nearby Shearwater platform and Noble Hans Duel drilling rig, which are operated by Shell, evacuated 85 workers on Tuesday. Ships have been ordered to keep 2 nautical miles from the rig, and a three mile air exclusion zone has been imposed around the area. The Maritime and Coastguard Agency have said that they have put in place these limitations “to give the teams that are trying to fix the problem a safe working area.”
Jake Malloy, the regional organiser for Rail, Maritime, and Transport (RMT) union, claimed that the incident is “unprecedented” for the area. “We are in the realm of the unknown, comparable to the Deepwater Horizon.”
Share price for Total fell 7.1 percent, the most since December 2008.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com