Let’s hope this is the beginning of the end of the blowout. DV
July 12, 2010
http://online.wsj.com/article/SB10001424052748704288204575362821280847274.html?mod=djemalertNEWS
By SUSAN DAKER And CASSANDRA SWEET
HOUSTONBP PLC said Monday night it had installed a new sealing cap that could halt the oil spewing from its broken well in the Gulf of Mexico, raising the possibility that a nearly three-month long environmental crisis could soon be contained.
It could be another 48 hours before the company knows if the cap has entirely sealed the well. During that period, the company will perform a series of pressure tests to check the well’s integrity. Concerns have been raised that the well could be even more damaged than previously known and that another uncontrolled leak could occur at any time.
The sealing-cap system hasn’t been used before at these depths or conditions, BP said, adding that the system’s “ability to contain the oil and gas cannot be assured.”
But if all goes according to plan, BP’s latest effort could finally bring the runaway well under control and make headway toward ending a saga that has cost the company billions of dollars and put it at odds with much of the American public and U.S. government.
.”We have to recognize that this is a complex operation,” said Doug Suttles, the company’s chief operating office, during a teleconference early Monday. “Our confidence is growing.”
The success of the U.K. oil company’s latest effort hinges on a variety of complex procedures. Some other efforts the company had been optimistic about in the past failed or were abandoned as too difficult in water so deep robots are required to do the labor.
BP has been working to contain the mile-deep leak since shortly after Transocean Ltd.’s Deepwater Horizon drilling rig exploded on April 20, killing 11 people.
“There are challenges with each of these steps. We have to understand that some of these operations could take longer than forecasted,” Mr. Suttles said.
As BP tests the new cap, a high pressure reading would be good news, indicating that the well is in fine shape and the new cap is confining all the oil.
Even if the cap doesn’t capture all the oil, installing it was a necessary step to prepare for an expected busy hurricane season. The new cap can allow containment vessels to more quickly disconnect from the system and flee a storm.
In the absence of bad weather, the cap will also allow more ships to connect to the well and therefore increase the amount of oil BP collects.
Mr. Suttles stressed that no matter how things work out with the cap, the company was still placing its faith in the ability of a relief well to permanently kill the overflowing well. The relief well could be finished by the end of the month, he said.
Also Monday, BP said in a Securities and Exchange Commission filing that the cost of its response to the crisis has risen to roughly $3.5 billion so far.
The company launched a new containment vessel Monday, the Helix Producer, and expected to have oil from the well reaching it by Monday evening. The ship has been near the well for about two weeks but was delayed from taking part in the operation by bad weather and technical problems.
With the Helix Producer still not up to full speed, only one ship was siphoning oil from the well, the Q4000, which flared off more than 4,000 barrels of oil during the last 12 hours of Sunday, the company said.
The rest of the oil is flowing into the Gulf, where about 50 skimmer ships were working to catch it when it reached the surface, Mr. Suttles said. Some oil was also being burned away on the surface of the water, he said.
Federal and independent scientists have estimated that between 35,000 and 60,000 barrels of oil have flowed into the Gulf from the broken well each day since the crisis began. The oil has fouled the shores of at least four coastal states and has damped tourism and seafood industries in the area.
For the past several weeks, the more loosely fitting cap and the Q4000 system have managed to keep as much as about 25,000 barrels a day out of the Gulf. The new sealing-cap system, plus additional measures, will allow the recovery of 60,000 barrels to 80,000 barrels a day in two to three weeks, BP has said.
Write to Susan Daker at susan.daker@dowjones.com
and Cassandra Sweet at cassandra.sweet@dowjones.com
Special thanks to Richard Charter