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Gulf Storm Puts BP Spill Efforts on Hold

Friday, 23 Jul 2010 09:47 AM

Tropical Storm Bonnie threatened efforts Friday to plug BP's Gulf of Mexico oil leak for good, forcing BP to move vessels working on a relief well out of the area.

"While these actions might delay the effort to kill the well for several days, the safety of the individuals at the well site is our highest concern," the top U.S. oil spill official, retired Coast Guard Admiral Thad Allen, said late Thursday.

Among the vessels being moved is the rig drilling a relief well intended to kill the leak permanently. It had been on track to intercept the ruptured well by mid-August.

BP capped the leaking well last week, choking off the flow of oil for the first time since an April 20 rig explosion killed 11 workers and sent crude gushing into the Gulf, soiling coastlines and devastating tourism and fishery industries.

Officials have said an evacuation could delay operations by 10 to 14 days. But the blown-out well will remain capped during the temporary halt to operations, including monitoring.

"It is a concern. The cap is only a temporary measure. the fact they've had to draw back to the coast is quite a worry," said Doug Youngson, oil analyst at brokerage Arbuthnot

"The pressure is building up. There is a risk it blows off," he added.

However, Peter Hitchens, oil analyst at brokerage Panmure Gordon, noted rough conditions could also help to disperse some of the spilled oil.

Workers have been close to launching a "static kill" operation to pump heavy drilling mud and possibly cement into the well.

BP's containment efforts have been keenly eyed by investors because BP's ultimate costs may hinge on how much oil is determined to have flowed into the Gulf.

Its shares traded down 0.5 percent at 398 pence, against a 0.7 percent rise in the European oil sector.

Investors also cast an eye to the impact of the spill on the company's second-quarter results due Tuesday.

Analysts at Barclays bank said BP could report a loss for the second quarter of $13 billion as it makes provisions of up to $25 billion for the cost of the oil spill -- far outweighing an expected 77 percent jump in underlying profits.

The company's stock is off about 40 percent from levels before the accident, despite a rally over the past month sparked by hopes of asset or stake sales and an end to the spill. At one stage $100 billion had been wiped off market capitalization.

"The fall in value has been overdone," said Aruna Karunathilake, manger of Fidelity's UK Aggressive fund.

BP's response to the largest offshore oil spill in U.S. history was marked by a series of public relations gaffes by top management and calls have grown for the ouster of Chief Executive Tony Hayward.

Friday, BP said it had removed doctored photographs of its oil spill response effort from its website, blaming a "simple error" that analysts said would further damage its already battered credibility.

BP published a photograph of a helicopter near the spill site which had been altered to give the impression the aircraft was in flight and to give a clearer view of vessels working on the relief effort.

Two BP managers have been named as subjects of a U.S. federal investigation into the explosion of the Deepwater Horizon oil rig, the Wall Street Journal said.

The U.S. National Hurricane Center said Bonnie, the second named storm of the 2010 Atlantic hurricane season, was packing maximum sustained winds of 40 miles per hour.

It formed near the Bahamas Thursday on a track that could take it over the BP spill site. The storm is expected to move into the eastern Gulf Friday night and Saturday.

Louisiana Gov. Bobby Jindal declared a state of emergency as the storm is forecast to hit the state's coast Sunday.

U.S. President Barack Obama, under political pressure for his handling of the spill, will spend the August 14 weekend along the hard-hit Florida Gulf Coast, the White House announced.


© 2017 Thomson/Reuters. All rights reserved.

 
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Tropical Storm Bonnie threatened efforts Friday to plug BP's Gulf of Mexico oil leak for good, forcing BP to move vessels working on a relief well out of the area. While these actions might delay the effort to kill the well for several days, the safety of the individuals...
bp,british petroleum,oil spill
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2010-47-23
Friday, 23 Jul 2010 09:47 AM
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