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Storm Delaying Additional Oil-Capture Capacity: BP Exec

BP's plan to increase oil-capture capacity this week at the Gulf of Mexico leak to up to 53,000 barrels a day will be delayed by high waves expected to be generated by Tropical Storm Alex, a company executive said Monday.

The Discoverer Enterprise burns off gas as it collects oil at the site of the Deepwater Horizon oil spill on June 19, 2010 in the Gulf of Mexico off the coast of Louisiana.
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The Discoverer Enterprise burns off gas as it collects oil at the site of the Deepwater Horizon oil spill on June 19, 2010 in the Gulf of Mexico off the coast of Louisiana.

But Kent Wells, senior vice president of exploration and production, told reporters in a briefing that as of Monday the storm was not expected to interrupt current oil-capture systems or the drilling of a pair of relief wells intended to plug the leak by August.

He said BP expects to continue those operations "unless unfortunately a storm heads directly our way."

Tropical Storm Alex is slowly intensifying and will likely strengthen into the first hurricane of the Atlantic season Tuesday, the U.S. National Hurricane Center said.

The NHC expects Alex to come ashore near the Texas-Mexico border early Thursday.

Wells said waves of up to 12 feet could cause a delay of up to a week in hooking up a third oil-capture system.

"While we are on track for the end of June, it will be roughly a week after that, the 6th or 7th of July," he said.

However, it was not yet certain that BP's cleanup will escape as the path of hurricanes is hard to predict precisely.

Coast Guard officials have said they do not think the storm poses an imminent threat to oil-siphoning efforts at BP's blown-out Macondo well in the Gulf.

Shell shut subsea production at two platforms and BP evacuated some personnel from three Gulf of Mexico platforms due to the threat of Alex, the companies said on Sunday.

Although a hurricane would interrupt BP's efforts to cap the well and to clean up the oil spill, some specialists say that in dispersing the oil, it could actually help mitigate the environmental damage.

Alex, the first named storm of the 2010 Atlantic hurricane season, had sustained winds of 45 mph (75 kph) and was about 60 miles (100 km) west-southwest of Campeche, Mexico.

While a tropical storm threatened oil spill cleanup efforts in the Gulf of Mexico, BP was forced to defend its chief executive on Monday after Russia's deputy PM said he expected Tony Hayward to resign soon.

BP said Hayward remained CEO and no change was under discussion after Igor Sechin said he expected Hayward to resign and that Russian officials would be told the name of his successor in Moscow on Monday.

Hayward is in Russia meeting top officials in a visit likely to address the Kremlin's worries over the company's local operations following its oil spill in the Gulf of Mexico.

Tony Hayward, BP Group Chief Executive
Eric Piermont | AFP | Getty Images
Tony Hayward, BP Group Chief Executive

The embattled CEO has drawn criticism for his response to the disaster and a series of gaffes as the oil threatens fisheries, tourism and wildlife along the Gulf coast.

BP shares, which fell to a 14-year low on Friday, were higher in London trading Monday. New York listed BP shares ended Friday's session sharply lower.

Economic Disaster

The oil spill has caused an economic and environmental disaster along the U.S. Gulf Coast, threatening fisheries, tourism and wildlife.

BP said on Monday it had hit a spend rate of $100 million a day on its efforts to cap the well, clean up the spill and compensate those affected, bringing the total bill so far to $2.65 billion. The group has set up a $20 billion compensation fund under U.S. pressure.

At the Group of 20 summit in Toronto on Sunday, Russian President Dmitry Medvedev, who heads the world's biggest energy producer, made a proposal for a global pollution fund, into which oil companies would be forced to pay.

Medvedev has questioned the future of BP and the Russian ambassador to Britain has said the country wants guarantees from BP that its Russian venture would not be affected.

Louisiana's fragile wetlands have been hardest hit by the oil but Mississippi had escaped damage until Sunday, when oil washed ashore there for the first time, although some oil had tainted its barrier islands.

Oil has also come ashore in Alabama and Florida's Gulf coast. Gluey gobs of brown oil and a rainbow oil sheen sloshed onto tourist beaches at Ocean Springs, Mississippi, about 10 miles (16 km) east of Biloxi, and at a beach used by fisherman that is close to an inland marsh.

'Life as I Know it is Over'

Mississippi state officials and the U.S. Coast Guard, who said they expect more oil to arrive, were waiting on BP contractors to start cleaning up.

"Life as I know it is over. What are we going to do if nobody cares to act fast enough?" asked Mike Hollings, a local resident who cried as he stared at the oil on the beach.

BP said on Monday a "relief" well it is drilling to kill the leaking Macondo well was closing in on its target. But after progressing at 1,000 feet a day last week, the well slowed to less than 100 feet/day as tests were conducted to try and locate its quarry.

British newspaper the Sunday Times reported, citing industry sources, that BP was on track to plug Macondo in a fortnight, or by July 11, but BP said it still expected completion three weeks later on around Aug. 2.

The U.S. government estimates that up to 60,000 barrels of oil (2.5 million gallons/9.5 million liters) per day are spewing from the damaged well on the seabed about a mile (1.6 km) below the surface.

While awaiting the completion of the relief wells, BP has been using two oil collection systems to prevent some of the oil from its ruptured well from spewing into the sea.

BP said on Sunday its crews had collected or burned off 22,750 barrels of oil on Saturday.

Equipment going to the leak site this week could raise daily collection to 53,000 barrels, officials say, and a review is scheduled of a system that may boost it to 80,000 barrels.