BP Controls Gulf Well That Caused Record Oil Spill

BP Plc said it controlled the pressure in its Gulf of Mexico oil well with drilling mud, a “significant milestone” in its attempt to permanently seal the source of the world’s worst accidental oil spill.

BP began pumping mud into the top of the well for its “static kill” operation at 3 p.m. local Houston time yesterday and the operation lasted about eight hours. The well “appears to have reached a static condition -- a significant milestone,” BP said in a statement in London today.

If the static kill is successful, BP would be able to plug the Macondo well from the top. The company still needs to complete a relief well to permanently seal the damaged well, National Incident Commander Thad Allen said at a Houston press conference.

Government scientists issued revised estimates on Aug. 2 that the well spewed 4.9 million barrels of oil, making it the largest accidental maritime oil spill. About 800,000 barrels was captured by BP, and some was skimmed or burned. Scientists expect to quantify within days how much oil remains in the Gulf, potentially in underwater plumes, Allen said.

“There’s still residual oil out there,” he said. “Our intention is to size our force based on the requirements -- how much oil is out there and how much do we have to recover.”

Three-quarters of the oil leaked from the well has evaporated, dispersed, or been recovered. The remaining oil is so diluted that it doesn’t represent much of a risk for the Gulf, the New York Times reported, citing a government report to be released today.

London Trading

BP rose 2.55 pence to 415.65 pence in London trading yesterday. It has fallen 37 percent since the Deepwater Horizon drilling rig exploded on April 20, killing 11 workers and triggering the spill.

London-based BP reported a record quarterly loss of $17.2 billion when it reporting earnings on July 27 after booking a $32.2 billion pretax charge related to the Gulf of Mexico oil spill. The company said it would expand asset sales to raise as much as $30 billion over 18 months to help pay for cleanup costs and liabilities from the environmental disaster, which also cost Chief Executive Officer Tony Hayward his job.

Ecopetrol SA and Talisman Energy Inc. agreed to buy BP’s fields in Colombia for $1.9 billion in cash, the company said in a statement yesterday.

Relief Well

BP said its relief well, which would inject mud and cement into Macondo from the bottom, will “most likely” intercept the damaged bore by mid-August. The company has said the relief well may complete the permanent kill by the end of the month.

Oil continues to wash ashore 20 days after BP stopped the flow by installing a new cap on the well. About 644 miles (1,036 kilometers) of the region’s coastline is oiled, according to a government operational report late yesterday. About a quarter of the Gulf remains closed to fishing, the National Oceanic and Atmospheric Administration said on its website.

Storms may drive oil onto shore through hurricane season, which ends Nov. 30, Allen said.

Scientists are trying to quantify in the next several days how much oil was skimmed from the surface or burned at sea, how much evaporated, how much was dispersed into the water and how much may yet hit shore, Allen said.

Bay of Campeche

The Macondo spill exceeds the 3.3 million barrels that the Royal Swedish Academy of Sciences estimated leaked from Mexico’s Ixtoc-1 well in the Bay of Campeche in 1979. The worst spill was in the 1991 Persian Gulf War when retreating Iraqi forces opened valves, releasing 6 million barrels into the sea, according to the U.S. Environmental Protection Agency.

BP is accelerating damage payments, saying yesterday it recognizes “frustration” from small-business owners as it transfers authority over claims to an independently administered fund. The company said it processed 2,600 claims during the past three days under an expedited system that eased documentation requirements.

The company has issued a total of 93,000 checks for $277 million in damage claims. Some claims will be deferred until later this month, when the $20 billion Gulf Coast Claims Facility run by Kenneth Feinberg will begin operating, BP said.