Wednesday, June 09, 2010

Closing in on closing the Gulf oil leak

Efforts to drill the relief well are underway. Capturing the escaping oil is working, and soon the process will improve to the point where it is capturing virtually all the oil. British Petroleum has responded to the Gulf catastrophe with speed and growing success. The company is gaining control over a bad situation. But it is moving toward the resolution of the crisis.

Not that stock investors have noticed. The price of BP shares fell below $34 when trading began today. That's a drop of more than 45% from its 2010 peak of $62.

BP earns more than $20 BILLION a year, which means it is prepared and capable of paying the full cost of cleaning the mess made by the leaking oil. Meanwhile, BP is a British company, which means the president of the US and the US government have little to say about the company's management outside of enforcing drilling and safety rules.

Investigations of the operation of the Transocean rig show its managers were attempting to following mandated safety and drilling rules. The operators may have made errors, but they were, nevertheless, attempting to operate according to regulatory requirements.

It is beginning to appear that the regulations themselves were the weak link in this chain.

BP says 'virtually all' oil to be captured soon

June 8

GULF SHORES, Ala. (AP) - A top BP executive says the company expects to be capturing virtually all the oil leaking from the Gulf floor by early next week.

Chief operating officer Doug Suttles told The Associated Press on Tuesday in Gulf Shores, Ala., that the flow should decrease "to a relative trickle" by Monday or Tuesday.

President Barack Obama plans to visit the region the same days.

Suttles says a second pumping ship should improve the process. And he says a new containment cap being built will seal better and reduce leakage.

He says BP believes the oil now washing up on the coast was spilled soon after a rig exploded about 50 days ago and sank.

Suttles says oil will probably continue to wash up for about the same period after the well fully shuts down.

A relief well expected to stop the flow is expected to be done in August.

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