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BP Runs Crucial Test on Gulf Oil Leak

Source: Reuters 7/15/2010, Location: North America

BP Plc was running a crucial test on Thursday on its ruptured Gulf of Mexico oil well that could stanch the flow of crude that has polluted the ocean and shoreline since April.

BP began the process on Wednesday night, which could stretch up to 48 hours. The British energy giant began the tests after getting the green light from top U.S. government officials who had delayed the plan by 24 hours on concerns the process could irreparably damage the well.

If tests, which will be assessed every six hours, show that closing the cap might cause further damage to the well, the capping device could instead be used as part of a complex system to capture the oil and siphon it to ships on the surface.

Kent Wells, BP's senior vice president of exploration and production, said undersea robots working a mile below the surface had started shutting a series of three valves designed to ultimately stop the oil flow completely.

Critically, BP has closed the main valve in the middle of the cap, "and we no longer have flow out the top," Wells said.

BP said late on Wednesday it had isolated a leak it detected in a line connected to one of the valves and was repairing it before proceeding with the test.

The developments will be watched by investors on Thursday as BP's ultimate costs may hinge on how much oil is judged to have flown freely into the Gulf. The disaster is the largest offshore oil spill in U.S. history.

On Wednesday, shares in BP ended 2.3 percent down in London in slow trading and were off about 1.9 percent in New York, with some analysts saying investors were likely cashing in profits ahead of further news on the new cap. After losing over half of its market value at one point in the wake of the April 20 rig explosion that killed 11 workers and unleashed a flow of crude, its share price had been staging a rally, spurred by talk that company executives were seeking investors and optimism of a turning point in the spill.

The decision to go ahead with the tests was taken after a day of intense deliberation that reached the level of President Barack Obama and his Cabinet, reflecting the stakes involved.

Retired Coast Guard Admiral Thad Allen, who is overseeing the U.S. response to the spill, has said if tests show the well can withstand certain pressures, odds are good it could be "shut in" indefinitely.

The disaster has soiled hundreds of miles (km) of shoreline, shut down about a third of Gulf fisheries, put BP on the hook for billions of dollars in cleanup costs and legal liabilities and prompted Obama to temporarily halt deepwater drilling.

Anger Over Spill
Anger among Americans over the failure to halt the spill added to Obama's political problems, distracting him from his legislative agenda and denting his popularity as his Democratic Party faces tough congressional elections in November.

In Buras, Louisiana, crabber Larry Tew said he was hopeful about the cap tests. "I think it's going to work. I mean, they don't have any other choice," he said.

At least some of the oil from the well has been siphoned off to ships in the past few weeks, but that operation was halted while the tests are undertaken. BP has said by the end of July four vessels can be hooked up and collect up to 80,000 barrels (3.34 million gallons/12.7 million liters) per day.

That should be more than enough to capture the whole well output, as estimates put the spill rate between 35,000 barrels and 60,000 barrels a day.

The only proven way to kill the leak lies in the drilling of relief wells to intercept the ruptured one. The first of two such wells started in May is expected to intercept it by the end of July and plug by mid-August.

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