BP - off the hook ? ...and a BUY ?

sabretoothtigger

Coast Guard admiral says oil leak has been stopped for now; too early to declare victory

http://www.wwl.com/Allen---Oil-leak-stopped----at-least-for-now/7337556

sabretoothtigger

2ndUPDATE:BP Shares +6% As Coast Guard Says Gulf Leak Stopped
(Adds details on oil spill volume.)

By James Herron

Of DOW JONES NEWSWIRES

LONDON (Dow Jones)--Shares in BP PLC (BP) rose sharply Thursday as U.S. Coast Guard Admiral Thad Allen, who is overseeing the disaster response in the Gulf of Mexico, said the company's "top kill" maneuver had successfully prevented oil and gas leaking from the well.

But the good news was tempered by the first official acknowledgment that the amount of oil that has been gushing from the well for over a month is much larger than initially estimated.

At 1509 GMT BP shares were up 5.8%, or 28 pence, at 520p in a broadly stronger market.

Allen told a New Orleans radio station that BP's "top kill" operation to plug the leak has "stopped the hydrocarbons from coming up," the well. However, he cautioned that the operation to seal the well permanently was not complete.

The key now, Allen said, is whether the heavy drilling mud BP is injecting into the well exerts enough sustained pressure for engineers to move forward with an operation to cement and seal the wellhead.

"The goal is to put enough mud down the well bore to the point where there is no pressure exerted back by the hydrocarbons and then allow a cement plug to be put in place," Allen told the radio station.

A BP spokeswoman said "operations are continuing," but declined to comment on Allen's statement.

Offsetting the positive news, a federal team created to study the flow officially put the leak rate at 12,000 barrels to 19,000 barrels per day, U.S. Geological Survey Director Marcia M!!!!t said Thursday. This compares with the previous official estimate of 5,000 barrels a day of oil.

The team also calculated the amount of oil on the surface as of May 17 to range between 130,000 and 270,000 barrels. A similar volume of oil had already been burned, skimmed or evaporated, M!!!!t said in a conference call.

This figure is crucial for BP, which could face a maximum civil penalty of $1,100 per barrel of oil spilled. This figure can rise to a maximum of $4,300 a barrel in cases where gross negligence is proven.

Oil has been leaking from BP's damaged Macondo well since an explosion that destroyed the Deepwater Horzion rig operated by Transocean Ltd. (RIG) on April 20. Oil has contaminated Louisiana beaches and marshes and killed wildlife.

http://bp.concerts.com/gom/kentwells_update24052010.htm


2.4bn in fees plus costs?

Thrugelmir

sabretoothtigger wrote: »

2.4bn in fees plus costs?

Political damage in USA could end up costing BP far more in the future. BP wasn't a popular Company prior to the leak.

StevieJ

The current exercise is not guaranteed as some blowback was encountered when the filling was stopped, now to continue for another 48 hours shares down 4.5%.

wombat42_2

clearing up the spill could be near impossible:
http://www.youtube.com/watch?v=GHmhxpQEGPo

1echidna

StevieJ wrote: »

The current exercise is not guaranteed as some blowback was encountered when the filling was stopped, now to continue for another 48 hours shares down 4.5%.

I don't think this was unexpected as they pummel that column of mud by running mud pumps for periods and then allowing flow to reverse to try and drive oil/water/gas out of the column to give themselves a good dense column of mud to finally achieve a stable mud column (at least that is my recollection having had it explained to me years ago) In this situation the head of mud at the wellhead due to the 5,000ft column is quite high (mud having twice the density of water).

rrwfotr

BP - off the hook ? ...and a BUY ?

Anyone buying BP shares at the moment could be very foolish, the cost to BP will be billions, they may even lose their licence to trade in the US, if that happens the shares would be worth next to nothing.

JamesU

1echidna wrote: »

I don't think this was unexpected as they pummel that column of mud by running mud pumps for periods and then allowing flow to reverse to try and drive oil/water/gas out of the column to give themselves a good dense column of mud to finally achieve a stable mud column (at least that is my recollection having had it explained to me years ago) In this situation the head of mud at the wellhead due to the 5,000ft column is quite high (mud having twice the density of water).

Obahma shifting stance, greatest minds in the world including Nobel prize physicist will be involved now. Reaction my side is to close open order on BP. Did come within 10% proximity of a buy a few days ago. Event, cleanup and litigation aside, too much uncertainty with drilling and US regulation issues to come in the short term. Will see how things shape up.

Obvious need to reconsider if Obahma requests Bruce Willis to spearhead a resolution to this. From what I remember he did a good job on an asteroid once, so the Gulf should be a piece of cake.

tradetime

BP's "Top Kill" effort has failed, shares will likely take a big hit on Tuesday when markets re-open.
http://www.bloomberg.com/apps/news?pid=20601087&sid=a3_O8dvwm028&pos=1

cardsharps

Does anyone know what percentage of the FT-SE 100 index BP comprises?
I'm guessing it was about 10% before its recent troubles. Or is that way off the mark?