BP Could Start Work on New Spill Cap By Saturday - Coast Guard

Deepwater Horizon Gulf of Mexico Oil Spill

HOUSTON (Dow Jones Newswires), July 9, 2010

BP could start work on a new effort to contain the oil gushing from the leak in the Gulf of Mexico on Saturday, the federal government's spill-recovery coordinator said Friday.

Ret. Coast Guard Adm. Thad Allen said work to remove the loose-fitting cap currently in place atop the well to allow placement of a better fitting device could begin "quite quickly." If all goes well, the new system could stop the flow of oil into the Gulf. However, BP declined to confirm whether or when it plans to begin this operation. Removal of the cap in place now before a third collection vessel is brought into full operation, would mean significantly more oil would gush into the Gulf as work on the new containment system progresses.

BP and the government have been in talks about the new cap for the past two weeks. On Thursday, Allen sent a letter to the British oil giant demanding it outline its plans within 24 hours. BP spokesman Steve Rinehart said "the decision hasn't been reached yet" to proceed with the new containment effort, though plans will be outlined in a letter to Allen the company expects to deliver by the end of the day Friday.

The process of putting the new cap in place could take several days, but it needs to be started soon because the weather forecast is clear for the next week, Allen said. The stronger cap will increase the collection system's ability to withstand storms during what's expected to be a very active hurricane season.

Once BP removes the cap from the top of the failed blow-out preventer on the sea floor, the capacity to capture oil gushing from the leak will temporarily drop.

For about three days, BP will only be able to flare off 10,000 barrels of oil a day piped up to the Q4000 ship on the sea's surface, and will not be able to store any oil.

By early Tuesday, BP should be able to improve its collection rates with the help of the Helix Producer, a third containment vessel that's been near the well site for more than a week but hasn't been brought into operation because of bad weather, Allen said.

While the new cap could be able to contain all of the oil flowing from the well, BP and the government have always placed more faith in the ability of a relief well to stop the spill. Allen said drilling of the relief well, underway now, could be finished by mid-August. Some BP officials are more optimistic and hope to have it done by the end of July, according to the Wall Street Journal.

The spill, the worst offshore leak in U.S. history, that's fouled the coast of at least four states, started in April after Transocean's Deepwater Horizon rig blew up and sank about 50 miles off the coast of Louisiana.

Copyright (c) 2010 Dow Jones & Company, Inc.

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