BP Increases Oil Collection; Nears Processing Limit

HOUSTON (Dow Jones Newswires), June 8, 2010

BP said Tuesday that it collected 14,800 barrels on Monday from a leaking deepwater well in the Gulf of Mexico, a sharp increase from the previous day's rate and putting the company close to the limit of how much oil it can process in the near term.

U.S. Coast Guard Admiral Thad Allen, who is overseeing the federal response to the spill, said a second ship should arrive in two to three days and should add 5,000 to 10,000 barrels of additional processing capacity. The current ship can only process 15,000 barrels of oil a day.

Officials continue laying the groundwork for what is meant to provide a more permanent cap than the one that was installed last week.

Any oil that can't be processed will continue leaking into the Gulf, and live feeds from the well site a mile beneath the water's surface show a sizable amount continues to gush from the area of the containment cap. The inability to more fully contain the spill and the lack of clarity on how much oil is leaking is putting additional pressure on BP as oil encroaches further on U.S. Gulf Coast areas.

"I've never said that this has been going well. We're throwing everything we've got at it. We knew this was catastrophic from the beginning," Allen said at a news conference in Washington.

He has directed BP to provide a longer-term containment plan, particularly one that will ensure the viability of the effort during the hurricane season.

Meanwhile, Jane Lubchenco, the head of National Oceanic and Atmospheric Administration, confirmed that water samples have found subsurface oil.

"There is oil subsurface--we have always expected that, but it's good to have confirmation," Lubchenco said.

The small underwater concentrations were found in three locations, though the findings at only one--40 nautical miles NE of the well site--was consistent with the BP spill. She noted that they are very low concentrations, less than 0.5 parts per million. She said NOAA will continue to study and release the data as they become available.

In the past four days, BP has collected 42,500 barrels of oil collected. On Monday, the company flared 30.6 million cubic feet of natural gas.

However, neither BP nor the government has provided an updated estimate of how much oil is actually spilling into the Gulf since the containment effort began on Thursday.

Two weeks ago, scientists led by the U.S. Geological Survey estimated a minimum of 12,000 to 19,000 barrels a day were gushing into the Gulf. The scientists also estimated that when BP chopped off a pipe connected to the broken well as part of its latest containment effort, it could have increased the flow rate by about 20%, at least temporarily.

Allen said Tuesday he was directing scientists to come up with an updated estimate to be released to the public.

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