HOUSTON (Dow Jones Newswires), June 18, 2010
Responders at the site of the mile-deep BP PLC (BP, BP.LN) spill in the Gulf of Mexico said Friday they captured some 25,000 barrels of oil on Thursday.
About 16,000 barrels of oil were collected and more than 9,000 barrels were burned. Some 50.3 million cubic feet of natural gas were flared, BP said in an update on its website.
The increased rate of capture--about 10,000 barrels of oil more than the typical figure for last week--puts BP on track to meet its plan to catch 53,000 barrels of oil by the end of the month.
U.S. Coast Guard Adm. Thad Allen said in a news conference Friday that he was "very pleased" to report the figure, which was higher than a previous estimate of 16,000 to 17,000 barrels given Thursday. The increase is due to the arrival of a second vessel at the site, named the Q4000, which is flaring all the oil and gas it is getting from the leaking well.
The news comes as the pressure on BP intensified both on Capitol Hill and at Wall Street. BP Chief Executive Tony Hayward testified before a Congressional committee Thursday--but his taciturn responses, reiterating mostly to say that BP was still investigating the causes of the incident that led to the spill and that the top management of the company was not involved in key decisions at the Macondo well site, visibly irked the Congressmen.
Earlier, the company agreed after White House pressure to create a $20 billion escrow fund to pay damage claims related to the disaster; Friday, ratings agency Moody's Investor Service downgraded the company's credit rating three notches due to mounting costs and litigation exposure. The agency lowered BP's senior unsecured ratings to A2 from Aa2, after a June 3 downgrade to Aa2 from Aa1. Fitch and Standard & Poor's also downgraded BP this week.
To cover the cost of stopping the spill and cleaning up the environmental and economic mess, BP will cut its capital spending by 10% to $18 billion in 2010 and by a greater amount in 2011, Chief Financial Officer Byron Grote said Wednesday. The company will also withhold its dividend until at least early 2011. So far the company has spent more than $1.75 billion on the spill.
Adm. Allen said that the containment efforts are going to "max out" at the end of the month. Then, responders would have to decide whether to replace the current system with more permanent floating production and offloading units that will be able to resist storms and collect up to 60,000 to 80,000 barrels a day. If most of the leak is contained by the current system it is possible that it will be left in place, he said.
The ultimate effort to kill the leak by drilling two relief wells is also progressing, Allen said. The first relief well is "starting to close in on the wellbore," Allen said, at a depth of 10,677 feet--nearly 700 feet deeper than on Thursday morning. A second back-up well was at a depth of about 4,600 feet. The official estimate for the completion of the first relief well is mid-August.
Copyright (c) 2010 Dow Jones & Company, Inc.
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