July 2, 2010 / 3:24 PM / 9 years ago

UPDATE 1-BP relief wells on target for August - Allen

* Relief wells ahead of schedule, August still finish date

* Oil-capture systems handle 25,154 barrels Thursday (Updates with details, quotes, adds byline)

By Kristen Hays

HOUSTON, July 2 (Reuters) - The first of two relief wells seen as the most promising way to plug the oil leak in the Gulf of Mexico is close to its target but drilling will be slow and precise in coming weeks, the U.S. official overseeing the spill response said on Friday.

“I’m reluctant to tell you it will happen before the middle of August,” Thad Allen, a retired U.S. Coast Guard Admiral, told reporters.

The well, which began drilling on May 2, is ahead of schedule, Allen and energy giant BP Plc (BP.L)(BP.N) said. Both have consistently said that well and a second one that began drilling on May 16 would be finished in August.

BP said the first relief well is less than 20 feet (6 metres) from the side of its blown-out Macondo well, which has been spewing oil from the seabed a mile (1.6 km) below the surface of the Gulf since April 20.

The relief well has bored 12,446 (3.8 km) feet beneath the seabed, Allen and BP said. The leaking well is 13,000 feet deep and BP’s plan calls for the relief well to drill further down, parallel to the blown-out well, and intercept it at the bottom.

Once intercepted, BP intends to pump in heavy drilling fluid to stop the oil flow and then cement to plug the leak.

The second relief well has bored 8,792 feet beneath the seabed, BP said. It is a backup for the first relief well.

As the relief well nears it target, there has been speculation the leak could be plugged earlier than August.

Tudor Pickering Holt & Co, a Houston energy investment boutique, said in a note to investors Friday that barring weather-related delays, “relief well intersection could occur as early as late July” — two weeks ahead of schedule.

Allen said the August target date remains. He said drilling will stop every 20 feet or so to allow BP to use sensors to make sure the relief well is on the right path.

BP said earlier its oil-capture systems at the leak collected or burned off 25,154 barrels of oil on Thursday. (Editing by John O’Callaghan)

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