If the ongoing gas leak at French oil company Total’s Elgin-Franklin well is not brought under control, the firm could see its share price drop by 50 percent, according to Stuart Joyner, head of oil and gas at Investec Securities.
Total saw a near 8 percent drop in its share price just last week, reflecting investors’ fears that the leak could last months or worsen.
For now, the causes of the leak have not been determined.
Total said on Friday that two rigs had been mobilized to drill a relief well, and that it will be only a matter of days before that drilling starts.
The company said that the leak was isolated from other wells, and that there had been no drop in pressure in the other wells.
Joyner told CNBC that “there is not much appetite to buy Total [shares] anyway, and some hedge funds might make some marginal buying, but overall people don’t want the hassle.” He estimated that the chances of the leak off the coast of Scotland developing into the sort of crisis that BP faced in 2010 are one in seven.
Analysts are concerned that if the gas leak at the Elgin-Franklin facility is not brought under control rapidly, it could cause extensive damage to the environment and to Total.Page 1 of 2 | Next Page