French oil major Total
As Total tries to work out how to stop the leak at the Elgin platform, investors are figuring out the possible cost in lost production, repairs and environmental fines. More than $9 billion has been wiped off Total's market value since Tuesday.
Total dismisses the risk of an explosion off the Scottish coast and most analyst estimates are based on the leak being fixed. If a fix happens quickly and production is only lost for two weeks, estimates go as low as $150 million.
Even at the top end of the range, the accident is not expected to be as costly as BP's
The potential is low for this leak to escalate to a crisis on the scale of Deepwater Horizon, analysts at credit rating agency Fitch said of the Total incident.
They said Total was likely to keep its 'AA' credit rating because it had cash of over 14 billion euros ($19 billion) to cover costs from the leak, which sent a plume of gas into the air and forced the evacuation of workers from a nearby platform.
After falling 6 percent on Tuesday, shares in France's biggest listed company closed down a further 1.4 percent.
Total share price graph: http://link.reuters.com/mez37s
Total is looking at two main options to stop the leak: drilling a relief well nearby - which could take six months - or sending in engineers to kill the leak - faster but riskier.
From the best-case scenario of $150-200 million for a quick solution, according to a CM-CIC Securities estimate, projected costs rose to $2.7 billion in the event of a six-month production halt in another estimate.
Exane BNP analysts said they would cut their projection for 2012 earnings by 2 percent if it took six months to repair the leak and two relief wells costing $44 million each were needed.
An explosion on the platform could cost of $10 billion even without potential fines for environmental damage, Bank of America Merrill Lynch analysts said.
Under this scenario, we believe Total's earnings could be hit 10 percent, they said.
TOTAL DIMISSES BLAST FEARS
But Total dismissed fears of a blast at the site, where explosive natural gas is bubbling less than 100 metres from a flare left burning when workers had to evacuate.
Total owns 46.2 percent of the operation, which accounts for 2.5 percent of its overall annual production or 60,000 barrels of oil a day.
Most analysts said the leak appeared to be nothing on the scale of the Gulf of Mexico oil spill and they suggested market reaction was overdone.
There was no loss of life or injury and Elgin produces gas and condensates, limiting the environmental impact in comparison with a spill of the heavier crude oil.
Natural gas bubbles to the surface and disperses in the atmosphere. In the Gulf of Mexico, oil accumulated in slicks.
Any local economic damage was also much less likely than in the United States because the nearest British coastline had fewer people and businesses than affected parts of Florida or Alabama.
We do not expect Total to incur major fines or provisions for compensation claims such as those incurred by BP, the Exane BNP Paribas analysts said.
Several analysts also pointed out that the Elgin field was located in shallower water than BP's Macondo well.
The Elgin field leak is a surface gas leak rather than an underwater oil leak, making its potential for environmental damage far lower than in the Deepwater Horizon, Fitch said.
Unlike the United States, Britain had no Clean Water Act in place, which also limits the scope for fines.
The killer liabilities for BP arising from the Macondo oil spill were economic damages and the U.S. Clean Water Act fines. So a spill in the UK North Sea bears far lower liability risks than in U.S. waters, JPMorgan analysts said.
($1 = 0.7506 euros)
(Editing by Matthew Tostevin)