Thursday, June 3, 2010

BP Cuts Riser From Leaking Oil Well; Prepares Cap

By Jim Polson and Katarzyna Klimasinska

June 3 (Bloomberg) -- BP Plc has sheared away the riser from its leaking Gulf of Mexico well, a precursor to the company’s attempt to lower a cap onto the leak and divert oil to ships on the surface.

The riser was cut off today, and setting a cap on the leak will take a “couple of hours,” U.S. Coast Guard Admiral Thad Allen said at a press conference in Metairie, Louisiana.

The company yesterday removed a diamond-blade saw after it got stuck during an attempt to make a second, finer cut on the well’s riser. BP today began using what it called a “massive pair of scissors” to shear off the pipes. The rougher cut may lead to a looser fit and a higher oil leakage rate between the blowout preventer, a five-story tall stack of safety valves, and the cap.

BP rose 12.4 pence, or 2.9 percent, to 442.15 at 2:34 p.m. in London. The shares have fallen 33 percent since the Deepwater Horizon drilling rig exploded April 20 and sank two days later, killing 11 workers and causing the leak.

The biggest oil spill in U.S. history has soiled about 140 miles (225 kilometers) of coastline, halted new exploratory deep-water drilling in the Gulf, shut down a third of its fishing areas and cost BP at least $1 billion.

The Financial Times today quoted Chief Executive Officer Tony Hayward as saying in an interview that it is “an entirely fair criticism” that BP wasn’t fully prepared for an oil leak in deep water.

Plugging the Leak

The company failed in its first effort to capture oil using a 40-foot-tall containment box from the well about a mile under water. BP removed a tube that was capturing a portion of the flow when it began its failed effort last week to stop the leak using drilling mud and cement.

BP and government officials have given up trying to plug the well earlier than August, when an emergency relief well can intercept the damaged hole, Allen said June 1.

“I’m still very optimistic they will be able to collect 80 percent to 90 percent of the oil,” said Nansen Saleri, chief executive officer of Quantum Reservoir Impact in Houston, a consulting firm that helps oil companies increase production. “It’s much better to go with solutions that, if not 100 percent, at least mitigate some of the damage. They’re going about it the correct way.”

Saleri was previously chief of reservoir management for Saudi Aramco, Saudi Arabia’s state-owned oil company.

--Editors: Tina Davis, Tony Cox

To contact the reporters on this story: Jim Polson in New York at; Katarzyna Klimasinska in Houston at

To contact the editor responsible for this story: Susan Warren at

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