UPDATE 1-BP says cost of spill about $3.5 bln

July 13, 2010 By Leave a Comment

LONDON, July 12 (Reuters) – BP Plc (BP.L) (BP.N), which is making progress with a new containment system for its ruptured well in the Gulf of Mexico, said on Monday the cost of the spill had risen to about $3.5 billion.

It also said more than 52,000 payments have been made to claimants, totalling almost $165 million.

About 105,000 claims had been submitted, it added.

BP said as of July 10 the total amount of oil collected or flared by its containment systems was about 749,100 barrels.

It also repeated details about work on a new system that is due to capture almost all the oil spewing from the blown-out well. [ID:nN11145426] (Reporting by Eric Onstad; Editing by David Holmes)

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BP preparing to switch seabed oil-capture caps

July 11, 2010 By Leave a Comment

HOUSTON, July 10 (Reuters) – BP Plc (BP.L) (BP.N) prepared on Saturday to remove a containment cap atop its gushing Gulf of Mexico oil leak and replace it with a bigger cap and seal that could fully contain the crude, the company said.

BP said in a statement that the process would take four to seven days. In the time between the current cap’s removal and before the new cap is bolted on, crude will gush unchecked from the leak, BP said.

But once the new cap is installed, it could ensure no more crude leaks from the seabed. Oil captured by the cap would be funneled to vessels on the surface.

At the same time, the company was hooking up and testing a third vessel in hopes that it could begin siphoning crude late on Sunday.

The two procedures are part of BP’s overall effort to set up an upgraded oil-capture system with four vessels that can handle up to 80,000 barrels a day and disconnect and move quickly if a hurricane approaches.

Kent Wells, BP’s senior vice president of exploration and production, was slated to explain the complicated processes later on Saturday.

The cap switch is a critical step in increasing BP’s oil-collection capability with a hurricane-ready system until a relief well intercepts the blown-out Macondo well and kills the leak by early to mid-August.

Retired Coast Guard Admiral Thad Allen, the top U.S. official overseeing the oil spill response, approved the cap switch late on Friday.

The current cap is on the jagged remnant of a pipe atop failed blowout preventer equipment. It has a seal that doesn’t capture all the crude, and a live video feet of the seabed shows oil billowing out from under it and from open vents on top.

That remnant will be removed along with the current cap, so the new cap and seal will be bolted on a larger surface with no jagged edges. That is expected to ensure all or most leaking crude is captured, Allen has said.

BP’s current oil containment system involves two vessels, Transocean Ltd’s (RIG.N) RIGN.S Discoverer Enterprise drillship, and Helix Energy Solutions’ (HLX.N) Q4000 rig.

The Enterprise is connected to the current containment cap by a fixed pipe, and needs at least five days’ lead time to disconnect and get out of a hurricane’s path. Its collected oil is processed and shipped to shore by a tanker.

The Q4000 is connected to a failed blowout preventer at the seabed via a hose and pipe. It cannot process oil, so the rig burns off collected crude.

The combined system can handle up to 28,000 barrels a day of oil. On Friday, the system collected or burned off 24,790 barrels.

BP originally intended to add the third vessel, a rig called the Helix Producer, by June 30 but rough seas caused by Hurricane Alex delayed its hookup. The Producer can handle up to 25,000 barrels a day, and was hooked up to the blowout preventer by a second hose and pipe.

An eight-day window of good weather prompted BP to hook up the Producer this week and begin the cap switch, the company said.

Once the new cap is installed, BP will be able to move toward the 80,000 barrel-per-day collection system later in July. The Producer will stay in place, but another vessel will replace the Q4000. A pair of drillships will be hooked up to the new cap by drillpipes, according to BP’s plan. (Reporting by Kristen Hays, editing by Vicki Allen)

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BP lays out riskier move to cut flow of oil

June 3, 2010 By Leave a Comment

(Reuters) – BP Plc started sawing extraneous pipes on Tuesday at the seabed site of its latest attempt to corral oil leaking from a ruptured well in the Gulf of Mexico.

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Moving past its failed “top kill” attempt to plug the leak, BP focused on containment rather than stopping the flow.

“We’re not talking about capping the well anymore. We’re talking about containing the well,” Coast Guard Admiral Thad Allen said at a news conference on Tuesday.

BP is counting on a pair of relief wells being drilled to intercept and plug the leak far beneath the seabed.

But the relief wells, each begun in May, will not be finished until early to mid-August — forcing the company to keep seeking a stopgap.

This week BP aims to place a containment cap with a grommet seal at the bottom on top of a lower marine riser package, or LMRP, that sits atop a failed blowout preventer at the seabed.

If the cap and seal work as hoped, leaking oil and gas will be channeled through a pipe that connects the cap to a drillship a mile above the seafloor.

In addition, BP is planning to back up the containment cap operation by using seabed equipment installed for the failed top kill to pull oil and gas from the well and channel it to a different vessel at the water’s surface.

BP expects that system to be ready by mid-June.

The company also is planning a containment system that can be interrupted if a hurricane blows through the Gulf. The 2010 Atlantic hurricane season began on Tuesday, and forecasters expect it to be active.

That would involve a riser that hangs 300 feet below the water’s surface, and can connect to a hose attached to the containment cap.

If a storm approaches, the hose can be disconnected so the drillship can move out of the way, BP spokesman Jon Pack said.

The company has consistently said it expects up to a fifth of the leaking oil to escape the cap and seal.

SAW AND SHEAR

Pack said that a diamond saw held by one of several underwater robots at the seabed on Tuesday was removing pipes next to a larger, broken pipe — called a riser — from which up to 19,000 barrels (800,000 gallons/3 million liters) of oil are leaking into the Gulf daily for the sixth consecutive week.

At times, the sawing could be seen on BP’s live seabed wecbam feed.

The riser bent and broke as Transocean’s Deepwater Horizon drilling rig exploded and sank in April, killing 11 workers.

Once the smaller pipes are gone, the robots will use huge shears to slice off the riser.

Then the saw will shave jagged bits to create an even opening for the cap.

Pack said oil and gas would “very definitely” spew from the opening during the operation. U.S. scientists said the move could temporarily increase the flow by 20 percent.

White House adviser Carol Browner called the possibility that the flow will temporarily increase “deeply, deeply troubling.”

BP said the cap is expected to be deployed later this week.

The cap is similar in theory to a much larger containment dome that BP tried to place over the end of the broken riser in early May. Cold seawater filled the dome and mixed with natural gas at high pressure, forming a type of ice that blocked oil from flowing upward.

Pack said the smaller containment cap is designed to keep seawater out and avoid that problem.

Analysts are skeptical of the cap plan.

Given previous failures, “this new prospect does not give us any real confidence that it will succeed,” analysts from British firm Arbuthnot Research said in a note to clients.

(Additional reporting by Anna Driver and Tom Bergin)

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