[THS] Crude Oil Leaking Again

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http://noir.bloomberg.com/apps/news?pid=20601087&sid=aCZDIa2DTeKk&pos=8

U.S. Demands More Test Data From BP After Seep Found (Update1)

By Katarzyna Klimasinska

July 19 (Bloomberg) -- U.S. government officials demanded to see BP Plc’s plans for
reopening its sealed Gulf of Mexico well after tests found a suspected leak seeping
from the seabed.

In a letter addressed to Bob Dudley, BP managing director, National Incident
Commander Thad Allen said tests had detected a “seep a distance from the well and
undetermined anomalies at the well head.” The letter was posted yesterday on the
website of the joint information center for the spill.

No decision was announced as to whether BP will be ordered to open the valves
sealing the well, which would allow oil to resume flowing. BP would restart efforts to
capture the oil and funnel it to vessels at the surface after the well is opened.

“I direct you to provide me a written procedure for opening the choke valve as
quickly as possible without damaging the well should hydrocarbon seepage near the
well head be confirmed,” Allen wrote in the letter.

Hours before, BP officials said the company planned to keep the well sealed until it
could be permanently plugged by a relief well. Three days of tests on the capped
well showed no signs of a hidden leak or other problems that would prompt BP to
reopen the well, Doug Suttles, chief operating officer for exploration and production
for BP, said yesterday in a conference call from Houston.

Data Watching

The cost of the response to the spill has risen to $3.95 billion, BP said in a statement
today. The shares fell as much as 7.4 percent in London and traded at 387.9 pence
as of 9:07 a.m. local time. That’s more than 40 percent lower than when the spill
began three months ago.

Pressure inside the well rose slowly to 6,792 pounds per square inch from 6,700
pounds per square inch at the start of the day July 17, an encouraging sign that the
inside of the well may have escaped damage following an April 20 explosion aboard
the Deepwater Horizon drilling rig, BP said.

The pressure reading is still lower than the 7,500 pounds per square inch BP initially
said would give it confidence to declare the well sound. Kent Wells, BP’s senior vice
president for exploration and production, said the lower pressure was consistent with
a depleted reservoir after oil had been gushing three months.

It’s not unusual for bubbles of gas to seep from the seabed, Darryl Bourgoyne,
director of the petroleum engineering laboratory at Louisiana State University, said.

“It could be a leak, it could be biogenic gas, gas created by bacteria,” he said. “It
could lead to opening the well if they’re very, very cautious.”

Records

Allen’s letter demanded BP provide records and documentation of all the tests it is
running on the well while it remains sealed.

“Monitoring of the seabed is of paramount importance during the test period,” Allen
wrote. “As the National Incident Commander, I must remain abreast of the status of
your source control efforts.”

Bill Salvin, a BP spokesman, said BP complied with all government requests and will
continue to do so.

The relief well, the only option for permanently plugging the well by filling it with
mud and cement, should remain the priority over other attempts to stop the oil flow,
Allen said. He asked BP to provide him with a plan and schedule for all well control
efforts and how they might conflict or delay the relief well.

Valves

BP bolted a 40-foot (12-meter) stack of valves on top of the well that it used to stop
the flow of oil July 15, when it began testing for damage. The company temporarily
halted drilling its relief wells while it conducted tests on the capped Macondo.

Work has begun again, and the wells should intercept the leak by the end of the
month and have it plugged by mid-August, Suttles said.

The Macondo well has produced the biggest oil spill in U.S. history, spewing 35,000
to 60,000 barrels of oil a day from a mile-deep in the water, according to a U.S.
government-led panel of scientists.

BP was prepared to reopen the well and let the oil flow if tests indicated there were
hidden leaks that could be made worse by leaving the well sealed, Wells said.
Resuming the containment process might take three days, during which oil would
again be spilled into the Gulf, Suttles said.

The main purpose of the new cap sitting on the top of the well, built with assistance
from Transocean Ltd. and Cameron International Corp., was to help channel more oil
to the surface if the well could not be sealed, Allen has said.

The previous, loose cap allowed BP to capture about 25,000 barrels a day of oil from
the well, while still letting some escape. If it’s necessary to reopen the well, the new
installation would enable vessels to eventually contain about 80,000 barrels, Suttles
said.

To contact the reporter on this story: Katarzyna Klimasinska in Houston at
kklimasinska at bloomberg.net
Last Updated: July 19, 2010 04:33 EDT

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