The apparatus collecting oil and natural gas spewing from BP plc’s blown Macondo well a mile below the surface of the Gulf of Mexico (GOM) prevented 11,100 bbl of oil from flowing into the GOM on Sunday, according to press reports.
On Saturday 10,500 bbl of oil was collected; additionally, 22 MMcf of gas was flared, the company said.
Called a lower marine riser package (LMRP) containment cap, the apparatus was installed last Thursday. From the time of the installation through last Saturday the volume of oil collected was 16,600 bbl, with 32.7 MMcf of natural gas collected and flared, according to BP.
“Optimization continues and improvement in oil collection is expected over the next several days. It will be a few days before an assessment can be made as to the success of this containment effort,” BP said Monday. The company is providing daily updates on the amount of oil and gas being captured at www.bp.com.
Analysts at Tudor, Pickering, Holt & Co. Securities Inc. (TPH) said Monday morning the latest estimates of oil collection were “great news.” They penciled out that the value of the collected oil when calculated as potential fines avoided by BP “should be almost $4/share in relative performance today. Let’s watch and see if that works.”
It didn’t. At the end of trading Monday BP shares closed down more than 1% at $36.76. And according to the TPH analysts, the court of public opinion will be a harsher judge than Wall Street.
“For [public/political] sentiment on BP the glass is half empty…perhaps irrevocably,” the analysts wrote. “…[T]echnical progress is likely to continue to be made…[P]olitical progress may be something completely different. The political progress will be very important to getting the offshore drilling industry back to work in the deepwater GOM…While watching the little picture, keep your eye on the big picture.”
While the recent progress so far on containing the oil flow has been encouraging to many, it came too late to prevent the fouling of more than 100 miles of coastline from Louisiana to the Florida Panhandle. Officials at Panama City Beach, which is in the middle of Florida’s Panhandle, were expecting oil to reach its beaches within 72 hours, the Associated Press reported Monday. This would be a new easternmost point for oil landing on shore, the news service said.
“We all know about the recovery on shore, but the emphasis over the last couple of weeks has shifted to the area between the shoreline and out about 50 miles,” U.S. Coast Guard Admiral Thad Allen said Monday. “Because what’s happened, over the last several weeks, this spill has disaggregated itself. We’re no longer dealing with a large, monolithic spill; we’re dealing with an aggregation of hundreds or thousands of patches of oil that are going a lot of different directions.”
BP was continuing preparations for enhancements to the LMRP cap system.
The first planned addition will use the hoses and manifold that were deployed for the unsuccessful “top kill” operation to take oil and gas from the failed Deepwater Horizon blowout preventer (BOP) through a separate riser to the Q4000 vessel on the surface, in addition to the LMRP cap system. This system is intended to increase the overall efficiency of the containment operation by possibly increasing the amount of oil and gas that can be captured from the well. It is currently expected to be available for deployment in mid-June.
The second planned addition is intended to provide a more permanent LMRP containment cap system by directing the oil and gas to a new free-floating riser ending approximately 300 feet below sea level. A flexible hose then will be attached to a containment vessel. This long-term containment option is designed to permit more effective disconnection and reconnection of the riser to provide the greatest flexibility for operations during a hurricane and is expected to be implemented in early July.
In the meantime, work on the first relief well, which started May 2, continues. The well has reached a depth of 12,956 feet. The second relief well, which started May 16, is at 8,576 feet, and testing of the BOP is continuing. Both wells are still estimated to take approximately three months to complete from commencement of drilling.
Work continues to collect and disperse oil that has reached the surface of the sea, to protect the GOM shoreline and to collect and clean up any oil that has reached shore.
The cost of the response to date amounts to approximately $1.25 billion, including the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid and federal costs, BP said. This excludes $360 million in funds for the Louisiana barrier islands construction project. It is too early to quantify other potential costs and liabilities associated with the catastrophe, BP said.
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