WRAPUP 2-Gulf oil well seal holding, BP looks to final kill

Fri Aug 6, 2010 3:15pm EDT

Related Topics

* Relief bore to intersect well shaft in mid-August

* BP executive says coastal cleanup "far from finished"

* BP shares remain buoyed by well shut-off news

* Questions remain over ecological, economic impact

(Recasts, adds quotes, details, background)

By Chris Baltimore

HOUSTON, Aug 6 (Reuters) - BP (BP.L) (BP.N) said on Friday the cement seal on its crippled Gulf of Mexico oil well was holding and a relief well to permanently plug the ill-fated borehole was on track to reach its target in mid-August.

As the final stages of the long-awaited "kill" operation moved forward, nagging questions remained about the lasting environmental and economic impact to the U.S. Gulf region from the world's worst offshore oil accident.

More than 100 days after the start of the catastrophic spill that ravaged ecologically sensitive wetlands and lucrative coastal economies, BP said no oil was leaking from the undersea Macondo well and no "recoverable oil" was left on the surface of the Gulf of Mexico.

BP finished pumping cement on Thursday into the ruptured well one mile (1.6 km) below the surface after injections of drilling mud earlier this week subdued the pressure of oil and gas. The wellhead was provisionally capped in mid-July.

The so-called "static kill" at the top of the well is due to be finished off with a "bottom kill" later in August with more mud and cement injected through a relief bore that will be drilled into the well shaft. This relief well is regarded as the final solution to plug the reservoir 13,000 feet (4,000 metres) beneath the seabed.

BP's chief operating officer for exploration and production, Doug Suttles, told reporters at a briefing the cement job "appears to be performing as expected."

"All of the indications so far look very encouraging," he said in New Orleans. Engineers were pressure-testing the injected cement.

Retired Coast Guard Admiral Thad Allen, who heads the oil spill response for President Barack Obama's administration, said the relief well was scheduled to reach the well shaft below the seabed "somewhere between August 14th and 15th."

"We are unequivocally committed to completing the relief wells," Allen said in a conference call. A second, back-up relief well is also being drilled. <^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For full spill coverage link.reuters.com/hed87k Special report on new BP CEO Dudley [ID:nN29102489] Graphic on relief well link.reuters.com/xes52n Breakingviews [ID:nLDE6740LL] Political risk factbox on the U.S. [ID:nN02255831] ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Asked if BP would sell its rights to the Macondo field, Suttles replied: "We just haven't thought about that."

"Clearly there is lots of oil and gas here and we will have to think about what to do with that at some point," he said.

The well's sealing was a relief for both the British energy giant, whose shares and image have taken a beating from the spill, and for Obama's administration, which has faced criticism over its response and has pledged to help the pollution-struck Gulf Coast recover.

BP shares, which have recovered strongly since hitting a 14-year low on June 25, appeared once again to be buoyed by the news of the progress in plugging the well. They rose more than 2 percent in early London trading before falling back to close up 0.46 percent. In New York, BP shares were up 1.7 percent in late-day trading.

"FAR FROM FINISHED"

Suttles, who had led BP's overall oil spill response in the Gulf but was now returning to his chief operating officer role in Houston, nevertheless acknowledged the coastal cleanup effort was "far from finished."

"Clearly we feel like its moving to a new phase because we've been three weeks without new oil flowing into the sea, and we don't have oil out on the open water anymore. But we still have a lot of work around the shoreline," he said.

Mike Utsler was appointed to take his place in BP's Gulf spill response operation.

The company has lost over a third of its market value since the April 20 blast that killed 11 workers, sank the Deepwater Horizon rig and triggered the spill.

Questions remain about the final total of the cleanup bill and the damage liabilities and possible fines BP will face.

"If chapter one of BP's corporate nightmare took place largely under sea in the battle to plug the leak, the next chapter in this odyssey is likely to play out in courtrooms and law offices," IHS Energy analyst Andrew Neff wrote in a briefing note.

BP, which already agreed to a $20 billion escrow fund to guarantee cover of economic damage claims, has said it would sell about $30 billion in assets to address the costs related to the spill, and this asset selling process has started.

"More assets are expected to be up for grabs as BP shrinks itself to steel the company for a vastly different future than it envisioned back in April, when the firm was reportedly days away from announcing a massive oil discovery in the Gulf of Mexico," Neff added.

FEARS OF LONG-TERM IMPACT

Many Gulf Coast residents have seen their fishing and tourism livelihoods devastated by the spill. They and some scientists have expressed skepticism about the government's assertion this week that around 75 percent of the estimated 4.9 million barrels of oil leaked by the well had either evaporated, dispersed or otherwise been contained.

Carol Browner, Obama's energy and climate change adviser, on Friday defended the government declaration.

"No one is trying to oversell or undersell anything," she told a community forum in St. Petersburg, Florida, where local business owners said even the threat of oil washing ashore had been enough to dent their income. There was no actual oil impact on the St. Petersburg part of the Florida coastline.

BP was working to produce a Gulf Coast recovery masterplan within six months and hoped to get support for it from federal, state and local government, according to James Lee Witt, a former head of the Federal Emergency Management Agency and now a crisis management consultant, who has been contracted by BP.

Michael Hirshfield, chief scientist with the ocean conservation advocacy group Oceana, said it could be years before experts fully understood the spill's effects on the Gulf of Mexico ecosystem, or on species like the Atlantic bluefin tuna, which spawns in these waters.

"It's like trying to prove a negative. You have to wait longer for the absence of something," he said, as the group prepared to embark on a two-month trip to assess long-term impacts on coral, fish, sharks and other marine life. (Additional reporting by Tom Bergin in London, Michael Peltier in St. Petersburg, Tom Brown in Dania Beach, Fla., Matthew Bigg in Atlanta, Writing by Pascal Fletcher; Editing by Eric Beech)

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Comments (4)
Alkan wrote:
Alkan here:

THE WELL IS DEAD!!!!!!!

Noticed that BP finished the cementing and followed it with a “squeeze job” which I mentioned was needed to be done in other posts. I suspected they would do this, and it is a rather standard compression procedure to assure everything fits into any possible leaks (such as the annulus) and the layers of mud, cement, and rock are tightened up together — for a permanent seal. Also it allows the cement to set up quickly.

Today they will test the cement and unless they blow out again using a relief well there is no new danger to the Gulf.

I look at this like a fraction with a zero on top now for risk to the Gulf — making risk equal to zero.

Drilling the relief well into the Monster Zone again makes the total fraction or risk as much as 10% with the likelihood being over 90% no new risk.

My concern is that using the relief well to enter the formation is risky but using it to merely test the annulus (while unnecessary) will add little or no risk at all.

So I recommend only checking the annulus to “save face” for the Government’s order to use the relief well. Then after finding no communication with the annulus, declaring this whole NEW DANGER worry to the Gulf ended and the well “forever killed.”

The cement will be quite strong and the well may then be officially declared DEAD.

I can tell from what I know about oil and gas wells, that this was a success and this well can even NOW be declared totally dead.

They can start removing the BOP — to bring it to the surface. Then they will examine it to see what caused the Macondo well failure.

They will then know if the problems in the recent past found in the other BOPs of the two relief wells are the very same type problems that caused the Macondo blow out (due to its BOP problem).

I suspect there will then be a very clear understanding of this entire problem.

BP officials have in recent days hedged about committing to pumping cement down the relief well, saying only that the relief well will be used in some fashion.

They may opt to just use the well simply to test whether the reservoir is plugged by checking only the annulus.

This is good news, as that procedure will not open into the O&G of the Monster Formation again — to test the BOP of the relief well — and allow another blow out up through the faulty BOP the relief well is using.

I think Admiral Allen will come to realize that only checking the annulus using the relief well will be a total and complete scientific proof that the present bullhead kill did the KILL job.

Hopefully he will be advised by people who understand the O&G science and not by scientists who are trying to learn.

Being an old retired O&G man, I know this uneventful procedure — had all the necessary parts that are needed to completely seal all the problems.

It had the heavy mud, followed by cement — then followed by a “squeeze job” (that I mentioned in earlier posts should be used) to forever seal this well. In other words, “they did it right”, and the well is forever DEAD.

Unless of course — they drill into the Monster Zone again.

BP’s Senior Vice President Kent Wells most likely will explain this to Admiral Allen. Then hopefully Allen will agree that to save face, they still use the relief well — but only to check the annulus (without re-opening the Monster Zone)to then confirm what Kent Wells already knows (like I do).

I am glad this sad event is over and hope with a little forethought, and Monday Morning Quarterbacking, that both the Government and the Oil and Gas industry will learn to avoid such events.

I personally think that preparedness for events is the best insurance — and that includes quick cappable BOPs (in case they fail — such as the type I suggested to the offshore O&G Governing Agency.

THE WELL IS DEAD!!!!!!

Will it come back to life?

Only if Allen says “Reopen it.”

However there will still be some illogical people that think Zombies and Phoenix Birds are real — and imagine they might rise again from their graves).

Please “think twice” before reopening this Monster.

Aug 06, 2010 1:45pm EDT  --  Report as abuse
Alkan wrote:
Alkan here:

I just read in the news that with the immediate danger from this Macondo well ended, that BP management was talking about possibly producing their lease from this same Monster Zone in the future.

A reporter asked Admiral Allen about that and he said he denied NOW thinking about such possibility.

All this means that our view is now to the future and what will happen.

Suppose BP makes Admiral Allen happy and does reopen the Monster Zone (taking the small risk of it blowing out).

Once it is open and “under control” will they then ask to produce it because 1)it is their lease and 2)it would be safe to produce?

My scenario above would then be changed by the management of BP and the subsequent approval of production by the Government.

Is the small risk of reopening the Monster Zone worth it for BP’s management to go along now with Allen?

Tune in again in about 10 days to find out when the relief well is doing its thing.

How would you vote?

1)Drill in and risk it (for the sake of production)?

Or

2) Just test only the annulus and not drill into the Monster Zone, then plug it?

Too bad your vote will mean nothing!

Aug 06, 2010 4:43pm EDT  --  Report as abuse
Alkan wrote:
Alkan here:

Les Ply, in Houston is a retired geologist and the World’s leading consultant to the oil industry on plugging wells.

Admiral Allen should pick up the phone and call him about what to do next.

Les also expressed his opinion that the Macondo well is now plugged and totally DEAD.

Just ask him what to do with this relief well NOW.

Allen NOT an oilman, and most likely is in this for the public interest.

He only knows what he hears and the noise is loud and deafening — and comes from all sides.

He has no real single unbiased authority (with no ax to grind) to listen to.

Just call Les Ply in Houston, Texas

Aug 06, 2010 7:38pm EDT  --  Report as abuse
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