Monday, May 3, 2010

BP tries to salvage status after Deepwater Horizon oil spill

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BP tries to salvage status after Deepwater Horizon oil spill

British oil and gas group's chief executive says it accepts role as 'responsible party' for clean-up

Simon Bowers
Monday May 3 2010
The Guardian

BP was fighting to save its reputation in the US, insisting the response effort was "the largest ever mobilised anywhere in the world".

The British oil and gas group, still bitterly remembered for the 2005 Texas City refinery explosion that killed 15 and for environmentally damaging pipeline leaks in Alaska, is reaching out to Louisiana communities, establishing town hall meetings and places for volunteers to enrol. It is also working with the local shipping community to make sure as many vessels as possible are available to help with the response effort.

BP's chief operations officer, Doug Suttles, denied that the company was not doing enough, insisting the response effort was "the largest ever mobilised". Meanwhile, BP America's chairman, Lamar McKay, told ABC News that the accident was caused by failed equipment, adding: "We don't know why it failed yet."

The cost to BP is $6m (?4m) a day, including attempts to cap the well, activate the cut-off valves known as the "blowout protector", and to disperse the expanding slick. Independent estimates have put the final bill at between $3bn and $12bn.

McKay said that efforts to trigger the blowout preventer were like carrying out "open heart surgery at 5,000 feet in the dark with robot-controlled submarines".

Tony Hayward, BP chief executive, has stressed BP accepts its role as "responsible party" for the clean-up and has pledged to cover all "legitimate and objectively verifiable" losses caused by the disaster. Yet BP is privately seeking to draw a distinction between the Texas City tragedy, where it was found directly responsible, and the Deepwater disaster, where Swiss firm Transocean was drilling on its behalf.

While the cause of the leak remains unclear, speculation centres on two areas: the "cementing" process to secure the well walls ? work that contractor Halliburton insists was completed 20 hours before the accident ? and the "blowout protector". The equipment, supplied by US firm Cameron International, "is the ultimate failsafe mechanism", Hayward said. "And for whatever reason, it failed to operate."

"BP will be graded on the things that I established early on that were the goals of this operation," said Admiral Thad Allen of the US Coast Guard. "The ability to stop the leak at its source; the ability to attack the oil at sea; to protect the resources ashore; and to recover and mitigate the impacted areas."

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