BP oil flow increases after accident

Wednesday, June 23, 2010
By Paul Martin

Oil was gushing largely unchecked from BP’s stricken Gulf of Mexico well on Wednesday night – after an accident dramatically increased the flow.

By Rowena Mason
23 Jun 2010

The oil giant had to remove a cap that was channelling 16,000 barrels per day to the surface, after a robot crashed into the capturing equipment. The collision raised fears that ice-crystals could have formed on the device.

BP is still piping some oil to the surface and burning it, but it could not confirm when it expects to replace the cap – its largest and most successful containment device to date. The latest blow to BP came as Ken Salazar, the US Interior Secretary, said all preliminary evidence pointed to “reckless conduct” in the run-up to the accident on April 20 that killed 11 men.

The oil company’s shares were roughly flat in London at 333.5p and up 1pc in New York at $30.02.

It has also emerged that US authorities are not relying on BP’s promises that it will stop its leaking oil well by August.

Tony Hayward, BP’s chief executive, has insisted the company will try to stop the leak by drilling two relief wells to cut off the flow with heavy cement by August. In previous accidents it has taken more than four attempts for this method to work.

Admiral Thad Allen, the US official co-ordinating the response to the disaster, said the authorities have been investigating new emergency measures should the spill go on any longer.

Mr Salazar and Steven Chu, the US Energy Secretary, called an industry gathering to identify other platforms in the area that could take some of the oil through pipelines along the ocean floor. Then it could be brought to the surface or pumped back into a reservoir.

“We’re exploring that over the next couple of days,” said Mr Salazar. “If we’re able to do that, that would give us an option of controlling the flow without having any surface vessels there.

“That wouldn’t be the capacity we’re looking for, but that would be another risk mitigator to handle some of the oil.

“We’re in exploratory conversations, and again, that was just the result of a meeting that we held last week where we asked industry to basically unconstrain their thinking and see what they could do for us.”

A BP spokesman said the oil giant is still confident that two relief wells will stop the flow within two months, adding that it was “sensible” to look at back-up plans. In further developments:

Þ New York’s pension fund said it plans to sue BP to recover losses on its 19m shares that have halved in value since the accident. Eleven other east coast states said on Monday that they are planning legal action. “BP ­misled investors about its safety procedures and its ability to respond to events like the ongoing oil spill and we’re going to hold it accountable,” said a spokesman.

Þ BP said its new body headed by managing director Bob Dudley is called the Gulf Coast Restoration Organization. Mr Hayward said: “Having grown up in Mississippi, Bob has a deep appreciation and affinity for the Gulf Coast, and believes deeply in BP’s commitment to restore the region.”

Þ The US Interior Secretary said he would soon issue a new ban on deepwater drilling off America’s coast, after a judge ruled the current moratorium “arbitrary”. Mr Salazar said the rules would be more flexible and may allow oil ­companies to drill in certain low-risk areas.

Þ The US Coast Guard also reported two deaths among BP’s army of clean-up workers in incidents unrelated to the collision.

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