Monday, September 20, 2010

153 Days & $9.5 Billion Later; BP Well Is Sealed

Sep 19: BP confirmed that well "bottom kill" operations on the MC252 well in the Gulf of Mexico were complete, with both the casing and annulus of the well sealed by cement. The MC252 well has been shut-in since July 15 and cementing operations in August, following the static kill ("top kill"), provided an effective cement plug in the well's casing. The relief well drilled by the DDIII drilling rig intercepted the annulus of the MC252 well on September 15, followed by pumping of cement into the annulus on September 17. BP, the Federal government scientific team and the National Incident Commander (NIC) have now concluded that these operations have also successfully sealed the annulus of the MC252 well. While it was leaking the well is estimated to have spewed some 4.9 million barrels of oil into the Gulf of Mexico.
    President Obama issued a statement on September 19, saying, "Today, we achieved an important milestone in our response to the BP oil spill -- the final termination of the damaged well that sat deep under the Gulf of Mexico. I commend Admiral Thad Allen, Secretaries Salazar, Chu, Napolitano, Administrators Jackson and Lubchenco, Carol Browner, the federal science and engineering teams, and the thousands of men and women who worked around the clock to respond to this crisis and ultimately complete this challenging but critical step to ensure that the well has stopped leaking forever. However, while we have seen a diminished need for our massive response that encompassed more than 40,000 people, 7,000 vessels and the coordination of dozens of federal, state and local agencies and other partners, we also remain committed to doing everything possible to make sure the Gulf Coast recovers fully from this disaster. This road will not be easy, but we will continue to work closely with the people of the Gulf to rebuild their livelihoods and restore the environment that supports them. My administration will see our communities, our businesses and our fragile ecosystems through this difficult time."
    NIC Thad Allen issued a statement saying, "After months of extensive operations planning and execution under the direction and authority of the U.S. government science and engineering teams, BP has successfully completed the relief well by intersecting and cementing the well nearly 18,000 feet below the surface. With this development, which has been confirmed by the Department of the Interior's Bureau of Ocean Energy Management, we can finally announce that the Macondo 252 well is effectively dead.   Additional regulatory steps will be undertaken but we can now state, definitively, that the Macondo well poses no continuing threat to the Gulf of Mexico.  From the beginning, this response has been driven by the best science and engineering available.  We insisted that BP develop robust redundancy measures to ensure that each step was part of a deliberate plan, driven by science, minimizing risk to ensure we did not inflict additional harm in our efforts to kill the well. I commend the response personnel, both from the government and private sectors, for seeing this vital procedure through to the end.  And although the well is now dead, we remain committed to continue aggressive efforts to clean up any additional oil we may see going forward."
    BP America Chairman and President Lamar McKay on completion of the MC252 Relief Well in the Gulf of Mexico issued a statement saying, "Today's completion of relief well operations on the Macondo well is a significant technological accomplishment and another important milestone in our continued efforts to restore the Gulf Coast. Our work is not finished, however. BP remains committed to remedying the harm that the spill caused to the Gulf of Mexico, the Gulf Coast environment, and to the livelihoods of the people across the region. BP will continue sharing what we have learned in an effort to prevent a tragedy like this from ever being repeated. We also believe that the industry will gain important insights on how to be better prepared to respond to any future incidents."

    Tony Hayward, BP group chief executive said, "This is a significant milestone in the response to the Deepwater Horizon tragedy and is the final step in a complex and unprecedented subsea operation -- finally confirming that this well no longer presents a threat to the Gulf of Mexico. However, there is still more to be done. BP's commitment to complete our work and restore the damage done to the Gulf of Mexico, the Gulf coast and the livelihoods of the people across the region remains unchanged."

    BP said it will now proceed to complete the abandonment of the MC252 well, which includes removing portions of the casing and setting cement plugs. A similar plugging and abandonment of both relief wells will occur as well. BP will also now begin the process of dismantling and recovering containment equipment and decontaminating vessels that were in position at the wellsite. BP said that a
pproximately 25,200 personnel, more than 2,600 vessels and dozens of aircraft remain engaged in the Gulf response effort. The company indicated that no volumes of oily liquid have been recovered from the surface of the Gulf of Mexico since July 21 and the last controlled burn operation occurred on July 20. BP, as part of Unified Command, continues to conduct overflights and other reconnaissance to search for oil on the surface. At peak, approximately 3.5 million feet of containment boom was deployed in response to the oil spill. Currently 670,000 feet of containment boom remains deployed.
    On August 23 processing of claims from individuals and businesses related to the Deepwater Horizon incident transferred to the Gulf Coast Claims Facility (GCCF). To date, over 68,000 claims have been submitted to the GCCF, with over 19,000 claims totaling over $240 million being paid, including a $34.5 million fund for real estate brokers and agents. Prior to the transfer to the GCCF, BP had made 127,000 claims payments, totaling approximately $399 million.

    BP said the cost of the response to September 17 amounts to approximately $9.5 billion, including the cost of the spill response, containment, relief well drilling, static kill and cementing, grants to the Gulf states, claims paid and Federal costs. On June 16, BP announced an agreed package of measures, including the creation of a $20 billion escrow account to satisfy certain obligations arising from the oil and gas spill.
    The Department of Interior, Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM) and Department of Energy (DOE) reported on the next steps and said; Oversight of the well now transitions from the National Incident Command to BOEM under a process laid out in the National Response Framework; DOI and BOEM will oversee the continuing decommissioning of the Macondo well and its associated relief wells; The relief wells will be plugged and decommissioned accorded to the regulatory guidelines that require the setting of multiple cement plugs and testing of plugs; and Before proceeding with the decommissioning of the relief wells, BP will be required to submit to BOEM an Application for Permit to Modify (APM) for approval that outlines its procedures to permanently plug the relief well.  
    Access a statement from President Obama (click here). Access a statement and further details from Thad Allen (click here). Access a release from BP on the closing including a statement from Tony Hayward (click here). Access the statement from BP's McKay (click here). Access a release from DOE and DOI (click here). Access more information on BP activities from the BP response website (click here). Access the Restore the Gulf website for more information (click here).