Total update on Elgin Platform

French oil group Total plans to start work next week on stifling a gas leak from its UK North Sea Elgin-Franklin field and views a gradual production restart later this year as possible, its finance director said on Friday.

Total, which earlier reported a slight fall in first-quarter net income, is attempting to carry out a so-called "well kill," its preferred option for halting the major leak that started in late March.

The launch of the well intervention, which will see heavy drilling mud injected down the well to smother the gas, follows the installation of a diverter device to take the leaking gas away from the vicinity of the production platform to make it safer for relief work to be carried out, Chief Financial Officer Patrick de La Chevardiere said.

"This (diverter) is a key step in improving the safety of the installation and we are preparing to start the well intervention next week. We remain confident that this will stop the gas leak," he told a call on Total's first-quarter results.

It was too early for a clear production outlook but Total saw a possibility that output at the evacuated platform would resume later this year, he said.

"Our teams are working on several scenarios and there is a possibility that we could restart gradually sometime before the end of the year," he said. "If we take a conservative view that Elgin-Franklin does not restart before year-end then (group) 2012 production could be flat."

Total has said previously it is targetting production growth of 2.5 percent a year during the 2010-2015 period, assuming crude oil at $100 a barrel.

The CFO said the Elgin leak was costing Total some $3 million a day, or about $1.5 million before tax and insurance for its relief operation and another $1.5 million in lost net income.

It had previously put the cost at $2.5 million a day, saying this would rise to $3 million with drilling of relief wells.

Relief wells are the alternative, more time-consuming option being pursued by Total to stop the leak at Elgin.

De La Chevardiere confirmed that drilling on the second relief well one would start within the next two weeks after drilling of the first one began last week