/ 4 August 2010

BP claims ‘milestone’ as drill mud holds well shut

Bp Claims 'milestone' As Drill Mud Holds Well Shut

Oil giant BP claimed “a significant milestone” on Wednesday in efforts to plug for good the well that has spewed millions of barrels of crude into the Gulf of Mexico.

“The MC252 well appears to have reached a static condition — a significant milestone,” BP said in a statement, adding that the deepwater well’s pressure was now being controlled by the heavy drilling mud pumped in on Tuesday.

The next step in the process, called “static kill”, is to pump in cement behind the mud as a seal, but BP said further monitoring was required to see if more mud should be pumped in first.

The world’s worst accidental marine oil spill has caused an environmental disaster and cost BP’s chief executive Tony Hayward his job.

“Static kill” could take 33 to 61 hours to complete, officials said before Wednesday’s breakthrough. It is part of a two-pronged strategy that seeks to finally seal the ruptured Macondo well later in August through a relief well that is still being drilled.

The full magnitude of the spill, triggered in April by a deadly rig explosion at the BP-owned Macondo well, became apparent earlier this week as government scientists released revised figures showing almost five million barrels of oil leaked before the well was temporarily capped on July 15.

This made it the world’s largest accidental maritime release of oil, surpassing the 1979 Ixtoc well blowout in Mexico’s Bay of Campeche that gushed almost three million barrels.

The spill has unleashed an environmental and economic catastrophe on the Gulf Coast, disrupting the livelihoods of fishermen and tourism operators and triggering a barrage of damages lawsuits against BP. The company has said it will pay all legitimate claims and clean up fouled beaches and marshes.

Investigation
Despite the breakthrough on the static kill operation, the new leak estimates could spell bad news for BP, which also faces an investigation by US securities regulators into whether its employees profited illegally from the spill.

The revised flow numbers suggest the company had underestimated costs by at least $1-billion.

BP had estimated the well had leaked about four million barrels of oil and that it would be fined $1 100 per barrel under the Clean Water Act. The company faces fines of $4 300 per barrel if gross negligence is proven, but said it saw no need to change its provision as a result of the new estimate.

However, a New York Times report said there could be some more upbeat developments on Wednesday from a government report due to be released. It said the report would show three-quarters of the oil released has already evaporated, dispersed, been captured or eliminated.

The company has suspended dividend payments, ring-fenced $20-billion, and put billions of dollars of its assets up for sale to help pay for its liabilities.

Anadarko Petroleum, one of BP’s partners in the well, said on Tuesday it had secured $6,5-billion in loan commitments, in part to pay for its liabilities. — Reuters