BP Nears Turning Point in Gulf Crisis


BP PLC may finally be reaching a turning point in the Gulf of Mexico oil crisis, as it prepared to test a newly installed containment cap that could stop the flow of oil from its blown-out well for the first time since the Deepwater Horizon rig sank nearly three months ago.

BP shares rose 2.9% to 410.35 pence in London on Tuesday, buoyed by rising optimism about the company’s latest attempt to stanch the leak and relief that the finale of the Gulf oil disaster may be in sight. BP’s stock has risen some 35% since hitting a 14-year low June 29.

Company engineers were due to begin pressure tests on the new custom-built cap late Tuesday, gradually closing its valves to shut down the flow of oil. If the results are encouraging, they may soon be able to cap the gusher that has been spewing as much as 60,000 barrels a day into the ocean and has defied BP’s best efforts to contain it.

But the company stressed the new system has never been deployed at such depths before and its success could not be ensured. Officials insist a relief well, which is still weeks away from completion, is still the only way to permanently plug the leak.

Success at halting the oil could ease some of the pressure on BP over its handling of a spill that has devastated fishing and tourism up and down the Gulf Coast and thrown the U.S. offshore drilling industry into chaos.

The company has so far spent $3.5 billion on the cleanup, and last month gave in to White House demands to set aside $20 billion in a special fund to compensate victims. The Obama administration handed the U.K. oil major a new bill of $99.7 million Tuesday.

BP was dealt a fresh blow Tuesday when Japan’s Mitsui Oil Exploration Co. Ltd, one of the co-owners of the blown-out well, said it would be withholding payment for its share of costs related to the spill. The other co-owner, Anadarko Petroleum Corp., made a similar statement last week, after describing BP’s behavior before the blowout as “reckless.” BP said it was “disappointed” by the Mitsui move.

The most important part of the new sealing mechanism—a “capping stack”—was specially designed and fabricated from scratch at a facility in Berwick, La., owned by Cameron International Corp., and underwent rigorous testing on land before being deployed to the mile-deep well.

The stack, 18 feet tall and 75 tons, contains large hydraulic rams or valves like those used in blowout preventers—the piece of equipment that sits on top of a well and controls unexpected surges of oil or gas.

The pressure test is designed to check the integrity of the leaking well, with high-pressure readings indicating the wellbore is intact, despite the April 20 blowout which triggered the spill, and strong enough to be shut in indefinitely. Low pressure would suggest oil is leaking out the sides into the seabed, and could breach through the seafloor. In that case, BP will likely abandon the test and open up the well again.

“If the test confirms high pressure…the well can remain shut in and there’ll be no leakage into the sea,” said Kent Wells, BP’s senior vice president of exploration and production. “We hope and pray that we see high pressures here.”

Even if the pressure is low, however, BP will still be able to continue collecting the leaking oil and piping it up to a fleet of ships on the surface. BP should have the ability to capture up to 80,000 barrels per day of oil by the weekend, according to retired Coast Guard Admiral Thad Allen, who is leading the government’s response to the spill.

While the company tests the well, it continued its collection efforts. As of Tuesday morning, a vessel called the Q4000 had collected 7,291 barrels of oil in the previous 24 hours, while the Helix Producer ship collected 1,011 barrels, a spokeswoman for the company said. The Helix Producer ship has the ability to collect up to 25,000 barrels of oil a day.

For the past several weeks, the more loosely fitting cap and the Q4000 system have managed to keep up to about 25,000 barrels of oil a day out of the Gulf.

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Stuart H. Smith is an attorney based in New Orleans fighting major oil companies and other polluters.
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