Monday, June 28, 2010

Day 70 BP Oil Spill Update: Alex Veers West; BP Spends $2.65 Bln

Jun 28: It now appears that the Gulf recovery and cleanup operations have dodged a big bullet as the tropical storm, now hurricane Alex, is predicted to reach landfall in Mexico or southern Texas. However, precautions are still being taken as high waves may reach the recovery and cleanup area and could disrupt or delay operations.
    BP reports that for the last 12 hours on June 27 (noon to midnight), approximately 8,340 barrels of oil were collected and approximately 4,100 barrels of oil and 28.8 million cubic feet of natural gas were flared. On June 27, total oil recovered was approx. 24,450 barrels (16,275 barrels of oil were collected; 8,175 barrels of oil were flared; and 56.2 million cubic feet of natural gas were flared). Total oil recovered from both the LMRP Cap and Q4000 systems since they were implemented is approx. 438,000 barrels. An additional 22,000 barrels were collected from the RIT tool earlier in May bringing the total recovered to approx. 460,000 barrels.
    BP indicates that preparations continue for the next step in containment operations. Work on the first floating riser containment system, which will be connected to the Helix Producer vessel, remains on schedule. It is currently anticipated that this system will be available to begin first operations at the end of June or in early July. The system is intended to provide additional oil containment capacity of approximately 20,000-25,000 barrels a day. Together with the LMRP cap and Q4000 systems, the addition of this new system should increase total oil containment capacity to 40,000-50,000 barrels a day. The floating riser system is designed to allow more rapid disconnection and reconnection of the system, reducing the time that collection may be impacted in the case of, for example, inclement weather.
    Plans also are being developed for potential additional containment capacity and flexibility, including a second floating riser system and additional capacity through a new cap on the BOP. These projects are currently anticipated to be available to begin operations around mid-July.
    The first relief well, which started drilling May 2, has reached a measured depth of 16,546 feet and has successfully completed a second "ranging" run using specialist equipment inserted into the well to help more precisely locate the MC252 well. Drilling and ranging operations will continue over the next few weeks as the well progresses towards the target intercept depth of approximately 18,000 feet. Once intercept has occurred, operations are expected to begin to kill the flow of oil and gas from the reservoir by pumping specialized heavy fluids down the relief well.The second relief well, which started May 16, is at a measured depth of 12,038 feet. Both wells are still estimated to take approximately three months to complete from commencement of drilling.
    To date, more than 80,000 claims have been submitted and almost 41,000 payments have been made, totaling more than $128 million. BP reports that the cost of the response to date amounts to approximately $2.65 billion, including the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid, and federal costs. The company stock is now trading at around $28 per share and the current market value has dropped to $87 billion -- Down about $100 billion since the tragedy began on April 20.
    Access the latest status update from BP (click here). Access slides on technical update from June 28 on the Subsea Containment & Relief Wells (click here). Access additional information on BP activities from the BP response website (click here). Access additional information updates and links to releases and briefings on the Administration's response from the Unified Command website (click here).