Trouble is brewing in the North Sea where a major natural gas leak is causing problems for Total SA, a multinational oil company. The leak began at one of the companies abandoned platforms, dubbed the “well of hell” by environmentalists. Total is claiming that it will take at least six months to shut off the flow of natural gas due to high pressures within the reservoir beneath the platform. The company now faces serious backlash from the insurance industry for being at the heart of yet another man-made environmental disaster.
In 2010, a disaster at British Petroleum’s Deepwater Horizon drilling platform caused one of the worst oil spills in modern history. According BP estimates, the disaster cost more than $3 billion, though these estimates differ from numbers provided by Swiss Re, a reinsurance and risk modeling firm, indicating that losses could total $12 billion. Though the North Sea natural gas leak is not as massive as the BP oil spill, losses are expected to be in the billions for Total as well as the insurance industry.
Following the disaster, shares of Total SA dived by 7%. The company’s shares do now show any sign of improvement due to the slow pace of progress made on reaching a solution for the problem. The leak is proving difficult to fix, as the natural gas spewing into the air is comprised of hydrogen sulphide, which is poisonous to humans. The platform is closest to the United Kingdom, where officials note that the gas will dissipate in the atmosphere but could present serious health risks for those closest to the eastern shore.
