Identifier
Created
Classification
Origin
08TRIPOLI368
2008-05-07 07:24:00
UNCLASSIFIED//FOR OFFICIAL USE ONLY
Embassy Tripoli
Cable title:  

LIBYA: TOTAL'S OFFSHORE OIL WELL SHUT DOWN

Tags:  ECON EINV EPET FR LY 
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TelegramRestricted by caption. UNCLASSIFIED TRIPOLI 00000368 
R 070724Z MAY 08
FM AMEMBASSY TRIPOLI
TO RUEHC/SECSTATE WASHDC 3405
INFO RUCPDOC/DEPT OF COMMERCE WASHINGTON DC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUEHRB/AMEMBASSY RABAT 0616
RUEHAS/AMEMBASSY ALGIERS 0665
RUEHTU/AMEMBASSY TUNIS 0496
RUEHEG/AMEMBASSY CAIRO 1082
RUEHVT/AMEMBASSY VALLETTA 0297
RUEHFR/AMEMBASSY PARIS 0469
RUEHRO/AMEMBASSY ROME 0419
RUEHLO/AMEMBASSY LONDON 0790
RUEHTRO/AMEMBASSY TRIPOLI 3909
UNCLAS TRIPOLI 000368 

SENSITIVE

DEPT FOR NEA/MAG; COMMERCE FOR NATE MASON
ENERGY FOR GINA ERIKSON

E.O. 12958: N/A
TAGS: ECON EINV EPET FR LY
SUBJECT: LIBYA: TOTAL'S OFFSHORE OIL WELL SHUT DOWN

UNCLAS TRIPOLI 000368

SENSITIVE

DEPT FOR NEA/MAG; COMMERCE FOR NATE MASON
ENERGY FOR GINA ERIKSON

E.O. 12958: N/A
TAGS: ECON EINV EPET FR LY
SUBJECT: LIBYA: TOTAL'S OFFSHORE OIL WELL SHUT DOWN


1. (SBU) Summary: A recent drilling accident brought drilling
and production operations in an offshore wellfield operated by
French oil company TOTAL to a halt. Although there were no
injuries or environmental damage, production (the field produces
about 45,000 barrels/day) will likely be halted for several
months until the wells can be repaired. Even if TOTAL
subsequently surges production to recoup its losses, it will
take several years to make up the lost production. End Summary.

DRILLING ACCIDENT


2. (SBU) In September 2003, French oil giant TOTAL started
production in Libya's Al Jurf field, located about 100
kilometers offshore in water averaging 90 meters in depth. The
field consists of a platform with ten production wells connected
to a floating production storage offloading (FPSO) vessel
located roughly 3km from the producing platform. Total operates
the block with a 37.5% interest (via its local operating
company, Mabruk Oil Operations) and is partnered with German oil
company Wintershall (12.5% interest) and Libya's National Oil
Corporation (50% interest).


3. (SBU) A drilling accident occurred at the field on April 17,
during work on a development well for gas injection. According
to TOTAL's Health, Safety and Environment (HSE) manager, the
drill went off-course and penetrated an adjacent production well
at a depth of 650 feet beneath the seabed. Due in part to the
safety precautions taken before the commencement of drilling,
including the shut-down of all production wells, there was no
oil spillage or injuries as a result of the accident. The
entire platform was evacuated within 48 hours as an additional
safety precaution against a well blowout, and production was
suspended indefinitely in all ten wells in the field.

OFFLINE FOR MONTHS...AT GREAT COST


4. (SBU) TOTAL's locally-based emergency team was activated to
secure the platform, and a specialized ten-member technical team
has been flown in from France to assess the damage and recommend
a course of repairs. Given the extent of the damage, the early
assessment from the team is that the entire field will remain
offline for at least two months. That best case scenario
involves making repairs from the platform itself, rather than
from a relief well, which would have to be drilled alongside the
damaged one. If it becomes necessary to drill a relief well,
the cost and timeline of needed repairs could expand
considerably.


5. (SBU) The Al Jurf field is fairly large field, producing an
average of 45,000 barrels/day. (Note: For sake of comparison,
that is roughly the daily crude oil production of Turkey. End
Note). Loss of production for several months will make a
significant dent in TOTAL's bottom line in Libya, and the NOC
will likely seek compensation for the shortfall in their
projected revenues. TOTAL's HSE manager noted that once
production is resumed, it could be surged to 52,000 barrels/day
or more to compensate for the loss of production for several
months. Even at that rate, the gap would only be closed after a
couple of years of uninterrupted production at the higher level.



6. (SBU) Comment: Although TOTAL has ably handled the
aftermath, this is a major accident and a blot on its record in
Libya. Insurance will likely cover TOTAL for its losses in the
short term and the continuing technical investigation may
determine that repairs can be completed quickly; however, the
tight market for offshore drilling ships could be a factor if it
is determined that a relief well must be drilled to complete
needed repairs. End comment.

STEVENS