GO
Loading...

BP Static Kill at Gulf Oil Leak on Tap for Tuesday

BPaims to conduct tests Monday before conducting a "static kill" on its Gulf of Mexico oil leak Tuesday, a company executive said.

Workers lay out new lines of boom along a pier on June 14, 2010 in Gulf Shores, Alabama.
Getty Images
Workers lay out new lines of boom along a pier on June 14, 2010 in Gulf Shores, Alabama.

"We want to confirm we can inject the oil in the wellbore back into the reservoir, said Kent Wells, BP's senior vice president of exploration and production. If the "injectivity" tests are positive, "then we move to the static kill," he said.

The tests will show whether BP can inject heavy drilling mud into the well and push oil back to the reservoir 13,000 feet beneath the seabed, he said.

If the static kill attempt sounds familiar, that's because it is. The company tried a similar process, called a top kill, to choke the well with mud in May. It failed partly because the mud couldn't overcome the flow of the oil.

There's reason to hope this time will be different. For one, the oil is no longer freely flowing from the well, thanks to the temporary cap that has contained the gusher for two weeks. That means that engineers won't have to pump in mud with as much force, said Kent Wells, a BP senior vice president.

There's always the risk that the pressure exerted by the mud will rupture the casing holding in the oil and potentially cause an even greater mess, but experts say it's very unlikely.

"I can't imagine it failing. It's holding pressure and there's no indication of any loss of fluid from the well," Eric Smith, associate director of the Tulane Energy Institute, said. "It's a vanishingly small risk of failure."

The whole procedure is still set to be completed by late August despite a brief evacuation for Tropical Storm Bonnie last week. And federal officials are downplaying its importance in case of a failure. Allen, the government's point man on the recovery effort, said Sunday that "static kill is not the end all, be all."

BP has had more than its share of failures experimenting with other ambitious efforts. So if the oil is already contained and the completion of the relief well appears to be just around the corner, why is the oil giant even bothering to attempt the complicated static kill?

One answer is that it should make it easier to finish the relief well. Crews are also drilling a second, backup relief well a few thousand feet behind the primary one, which is about 100 feet from its target.

If the static kill is successful, though, Smith said they likely wouldn't have to use as much mud to choke the oil. It's also a good way for BP to hedge its bets in case the relief well takes longer than expected to work, he said.

There's a third reason the company has embraced the static kill. Each day the temperature of Gulf of Mexico waters increases, so does the threat of another violent storm disrupting the cleanup process. Federal officials are hoping to end the oil threat once and for all before peak hurricane season, which typically lasts from mid-August to late October.

"If we can get this thing shut in permanently before the August hurricane season, we will have dodged a huge bullet," said Rear Adm. Paul Zukunft, the government's on-scene coordinator.


Investors Watch Carefully

After setbacks plagued earlier attempts to plug the well, this week's effort will be closely watched from Washington to London, from the Gulf coast to Wall Street.

The environmental disaster has devastated coastal communities, tarnished the British company's image in the United States and cost it billions of dollars in clean-up costs.

It has also eroded President Barack Obama's approval ratings and raised tensions between Washington and London.

BP's market value has fallen about 40 percent. Last week it posted a second-quarter loss of $17 billion after taking $32 billion in charges for the spill.

The rig blast killed 11 workers and unleashed a spill that killed countless marine creatures, soiled beaches and marshes and dealt a severe blow to fishermen and other businesses along the Gulf Coast.

It has also forced BP to put $30 billion of assets on the market, although a BP spokesman dismissed a German report which said it planned to sell its Aral retail network in Germany.

Meanwhile, BP Chief Executive-designate Bob Dudley will fly to Moscow this week to meet government officials and BP's oligarch partners in its Russian venture as the oil giant prepares to plug its blown out Gulf of Mexico well for good.

It will be Dudley's first visit to Russia since he was forced to flee the country in 2008, citing a campaign of harassment by its billionaire partners in the TNK-BP joint venture of which he was CEO.

BP has since settled its dispute about control of TNK-BP and the venture remains a key part of BP's portfolio, representing a quarter of total production and over 10 percent of profits.

A BP spokesman said the visit was to allow outgoing CEO Tony Hayward to "re-introduce" Dudley to Russian shareholders and to Russia's top energy official, Deputy Prime Minister Igor Sechin.

BP said last week Hayward would stand down following criticism of his handling of the worst offshore oil spill in U.S. history and that he would be replaced by Dudley in October.

TNK-BP's Russian co-owners and Sechin have welcomed Dudley's appointment.

Dudley said he never saw the pressure he came under in Russia in 2008—which BP said included the Russian side using the security forces to harass Dudley and his staff—as personal but instead as simply the nature of business in Russia.

Contact Law

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More