BP modifies plan to capture oil from leaking well

VENICE, La. Thu Jun 3, 2010 6:49pm IST

Oil floats on the surface of the Gulf of Mexico at the well head site of the Deepwater Horizon oil spill, June 2, 2010. REUTERS/Sean Gardner

Oil floats on the surface of the Gulf of Mexico at the well head site of the Deepwater Horizon oil spill, June 2, 2010.

Credit: Reuters/Sean Gardner

Related Topics

VENICE, La. (Reuters) - The latest plan to capture oil belching from a BP well into the Gulf of Mexico will work less well than originally hoped, the U.S. Coast Guard said on Thursday.

Shares in the energy giant rose in London trading on market hopes that the plan to use robot submarines to cut a riser pipe on the sea floor would succeed in capturing at least a good part of the gushing oil already causing an ecological and economic disaster for U.S. Gulf states.

At 1254 GMT, they were up 3.7 percent in part because the company scheduled a conference call with financial analysts on Friday.

Two U.S. senators said on Wednesday BP should suspend plans to pay shareholder dividends until the full clean-up costs of the massive leak are known.

Problems with cutting through the ruptured pipe forced BP to modify the latest in a series of plans to seal or contain oil from the leak, said Coast Guard Admiral Thad Allen.

BP first tried to use a diamond-tipped cutter to cleanly slice the top of the pipe creating a smooth surface over which they would place a containment dome to collect the oil. But the diamond cutter got jammed in the metal so the company has now turned to giant shears which will create a less clean cut.

"With the new shears cutting device they will try to use today, they will need to put the top hat containment dome on top of the pipe to contain the oil flowing out of it," Allen said in an interview with CNN.

For INSIDER TV, click link.reuters.com/zyx77k

For a graphic, click link.reuters.com/wyf57k

The top hat will not necessarily seal in the oil as effectively as the containment device they had planned to use with the diamond cutter. BP will also spread dispersants to counter any oil escaping from the top hat dome, Allen said.

The real solution to stopping the leak, which has wiped a third off BP's share value since it began in April, is by drilling a relief well, which won't be completed until August.

"That said, there's no reason why we can't contain this oil in the meantime and we're using all means available to do that," Allen said. "We're being relentless with British Petroleum to make this happen because we shouldn't tolerate oil being discharged clear until August."

The oil spill is causing an ecological and economic disaster along the U.S. Gulf Coast and has also hurt President Barack Obama, accused of being too slow to respond.

BP could face billions of dollars in fines and penalties if a Justice Department investigation finds wrongdoing, in addition to billions from the economic liability and damages, according to legal experts.

It may also find it more difficult to meet targets for expanded production in the future, analysts said.

"People seem to be latching onto some sort of optimism the current operations are going to be successful. Really, it's still very early," said Arbuthnot Securities analyst Dougie Youngson. "This procedure is fundamentally very risky and it's not over yet."

APOLOGY

While the plan inched ahead, CEO Tony Hayward retreated from yet another public relations gaffe -- apologizing for his widely reported remark, "I want my life back."

Thousands of fishermen, shrimpers and other seafood workers have been idled for weeks by government-imposed fishing restrictions that were expanded on Wednesday to cover 37 percent of U.S. federal waters in the Gulf.

In the struggle to minimize shoreline encroachment of oil, Louisiana Governor Bobby Jindal won White House approval on Wednesday for a controversial plan to essentially manufacture several new barrier islands off his state with sand dredged from the sea floor. Louisiana has been hardest hit so far by the oil slick.

The fragmented, far-flung oil slick posed a growing threat to several parts of Gulf Coast. Toxic goo from the spill crept to within 10 miles (16 km) of Florida's northwest panhandle, where officials said it could make landfall by Friday.

(Additional reporting by Kristen Hays, Eileen O'Grady and Chris Baltimore in Houston, Michael Peltier in Tallahassee, Jeremy Pelofsky in Washington, Verna Gates on Dauphin Island, and Joanne Frearson in London)

(Writing by Matthew Bigg; editing by Alan Elsner)

(For more business news on Reuters India click in.reuters.com)

FILED UNDER:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Consumer Confidence Index

REUTERS SHOWCASE

Corruption Probe

Corruption Probe

India to probe corruption in healthcare after TV sting.  Full Article 

Food Scandal

Food Scandal

Starbucks, Burger King dragged in as China food scandal spreads.  Full Article 

Bigger iPhones

Bigger iPhones

Apple asks suppliers to produce up to 80 mln large-screen iPhones - WSJ.  Full Article 

Gaza Conflict

Gaza Conflict

Israel keeps up Gaza assaults, Kerry presses for truce.  Full Article 

Ukraine Crash

Ukraine Crash

Bodies, black boxes handed over from Ukraine crash site.  Full Article 

Bali Trade Deal

Bali Trade Deal

India keeps world guessing in countdown to landmark trade pact deadline.  Full Article 

Bangalore Sex Abuse

Bangalore Sex Abuse

Modi's BJP puts political twist on local sex abuse case   Full Article 

Yahoo to buy Flurry

Yahoo to buy Flurry

Yahoo to buy analytics startup Flurry to bolster mobile ad business.  Full Article 

Wholesale Biz

Wholesale Biz

Wal-Mart adds $102.9 million in Indian wholesale business in June.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device.  Full Coverage