News

Pumped Mud Holds Well Shut; BP Execs Visit Russia

04.08.2010 -

Oil giant BP claimed "a significant milestone" on Wednesday in its efforts to plug for good the well that spewed millions of barrels of crude into the Gulf of Mexico over three months.

The world's worst accidental marine oil spill has caused an environmental disaster and cost chief executive Tony Hayward his job. He and his heir apparent, Bob Dudley, are due on Wednesday to visit Russia, home to a quarter of BP's output and a country Dudley fled in 2008 after a dispute with partners there.

But their minds could be focused on the United States, where a "static kill" effort is underway to subdue the still unstable deepwater gusher provisionally capped in mid-July.

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

The next step in the process is to pump in cement behind the mud as a seal, but BP said further monitoring was required to see if more mud would need to be pumped in first.

The "static kill" would take 33 to 61 hours to complete, officials said before Wednesday's breakthrough.

The operation is part of a two-pronged strategy that seeks to finally seal the ruptured Macondo well later in August through a relief well.

The full magnitude of the Gulf of Mexico spill, triggered in April by a deadly rig explosion at the BP-owned Macondo well, became apparent on Monday as government scientists released revised figures showing almost 5 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 3 million barrels.

Retired Coast Guard Admiral Thad Allen, who oversees the U.S. oil spill response for the U.S. government, told reporters on Tuesday that engineers were moving cautiously.

"This thing won't be truly sealed until those relief wells are done," Allen said.

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 U.S. 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 some 4 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, captured or eliminated.
BP shares fell 1.1% at 0850 GMT on Wednesday to 411 pence. The stock has recovered about half way from its low point in late June but remains well below its April pre-spill high.