BP hopes to quell Gulf disaster
With its containment cap clamped over the ruptured wellhead in the Gulf of Mexico, BP Plc executives say they hope to be siphoning off the bulk of newly spilled oil from the deep-sea gusher within days.Updated: Jun 05, 2010 14:35 IST
With its containment cap clamped over the ruptured wellhead in the Gulf of Mexico, BP Plc executives say they hope to be siphoning off the bulk of newly spilled oil from the deep-sea gusher within days. But initial estimates of how much crude was being collected from the floor of the Gulf and siphoned safely to the surface amounted to a fraction of the oil that continued to belch from the runaway well in the first hours of the new system.
U.S. officials sounded a guarded note on Friday about BP's latest bid to gain control over the 46-day-old spill. President Barack Obama, under fire from critics who question his leadership in the crisis, paid his third visit to the Gulf Coast since the April 20 offshore oil rig blowout.
The spill is causing an ecological and economic disaster for the U.S. Gulf Coast. Meeting with state and local politicians and residents in Louisiana, the hardest hit state so far, Obama said of the new oil containment system, "it is way too early to be optimistic."
British energy giant BP, facing a U.S. criminal probe amid mounting lawsuits, dwindling investor confidence and growing questions about its credit-worthiness, delayed word on whether it would suspend an upcoming dividend payment to shareholders, as some U.S. politicians demanded.
During a much-anticipated conference call with financial market analysts, BP also announced that it has named American executive Robert Dudley to guide the British company's "ongoing and long-term business response" to the disaster. British CEO Tony Hayward, who has faced criticism for a string of comments he has made in recent weeks about the accident, said Dudley's job will be, among other things, to "help manage" the impact of the disaster on BP's reputation and "restore trust and confidence of BP in America."
BP Chief Operating Officer Doug Suttles told U.S. TV networks the containment cap placed on the well pipe a mile (1.6 km) below the ocean surface "should work" by capturing upward of 90 percent of the gushing crude. He said it would take a few days for the system to reach full performance. Showing an uncharacteristic flash of anger, Obama warned BP against skimping on compensation it owes to fishermen, business owners and others whose way of life has been upended by the worst oil spill in U.S. history.
Obama chided BP for spending lavishly on TV advertising to improve its image and a plan to pay a $10.5 billion quarterly dividend to shareholders while the Gulf region faced economic and environmental havoc of epic proportions. "What I don't want to hear is, when they're spending that kind of money on their shareholders and spending that kind of money on TV advertising, that they're nickel and diming fishermen or small businesses here in the Gulf," Obama said.
On the road to the resort and fishing town of Grand Isle, Louisiana, Obama's motorcade passed a group of people standing in front of a house holding a cardboard sign that read: "Help us now."
BP's share price, which has fallen sharply since the crisis began, gyrated in London and New York. Standard & Poor's cut BP's credit rating to AA-minus from AA, following the example of two other rating agencies on Thursday. But Hayward insisted the company had plenty of money to meet its obligations, including $5 billion in cash and additional credit lines it could tap. It has already spent well over $1 billion on its oil spill response.
The far-flung, but fragmented oil slick appeared to make its first landfall in Florida as tar balls and oily sheen washed up on Pensacola Beach, putting a further damper on the $60 billion-a-year tourism industry of the "Sunshine State." U.S. Coast Guard Admiral Thad Allen said on Friday that BP's new containment system was capturing oil at an initial rate of about 1,000 barrels a day, just over 5 percent of the 19,000 barrels (800,000 gallons/3 million litres) a day the government has estimated could be gushing from the well.
Allen, commander of the U.S. spill response, said he expected the oil-capture rate to improve as BP gradually closes vents on the containment apparatus to trap more of the discharge. "Generally, progress is being made," Allen told reporters, but added, "we need to caution against over-optimism here." With the containment cap in place over the wellhead, the plan is to funnel escaping oil and gas into a large hose that would carry it from the bottom of the ocean to the surface, where it would be collected in ships and safely removed.
In any case, BP does not expect to fully halt the oil flow until August, when two relief wells are due to be completed. Neither Obama nor BP fared well in a new CBS public opinion poll on Friday that found an overwhelming majority of Americans believing that both the president and the company should be doing more to clean up the spill.
Eleven crew members of the BP-contracted Deepwater Horizon drilling rig were killed in the explosion that unleashed the disaster. The region's frustration with BP and the government was apparent on Friday at a free hamburger and hot dog lunch for out-of-work fisherman at the city hall in Lafitte, Louisiana.
"It's all up in the air right now," said Jerry Perrin, who has harvested crabs and shrimp for 60 years off Louisiana. "The government needs to start spending more money now." As networks continued to televise images of oil lapping into fragile marshlands and coating sea birds, the disaster claimed an increasing toll on the region's tourism industry.
"You see shells and jellyfish and trash, but I've never seen oil here. It's crazy," said Anthony Cross, while walking along Pensacola Beach with his three daughters, holding a child's fishing net full of tar. Globs of honey-colored goo also began washing ashore on Friday at Gulf State Park near Mobile, Alabama, as bathers swam in the water and children played on once-pristine beaches. "We were cautiously optimistic we'd get one last day at the beach," said Kristin Poole, from Mobile, who took her two children and their three cousins for what they hoped might be a final romp in the surf. "My heart's just broken," she said.
First Published: Jun 05, 2010 14:29 IST