BP Well Leaking Up to 60,000 Barrels a Day, U.S. Says

Photographer: Jim Lo Scalzo/Pool via Bloomberg

President Barack Obama speaks during a nationally televised address from the White House in Washington D.C. Close

President Barack Obama speaks during a nationally televised address from the White... Read More

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Photographer: Jim Lo Scalzo/Pool via Bloomberg

President Barack Obama speaks during a nationally televised address from the White House in Washington D.C.

BP Plc’s well in the Gulf of Mexico is gushing as much as 60,000 barrels of oil a day, the government said, again increasing a figure officials put at 1,000 barrels more than seven weeks ago.

The new estimate, with a range of 35,000 to 60,000 barrels a day, is more accurate because scientists used additional and better data, U.S. Energy Secretary Steven Chu and Interior Secretary Ken Salazar said yesterday in a statement posted on the official spill-response website.

The estimate is four times the average rate BP has been capturing oil at the site. A drillship has been collecting about 15,000 barrels a day while crude continues to gush from the well a mile below the surface. BP began burning oil and gas at a second vessel today to reduce the amount entering the Gulf, according to a statement.

President Barack Obama and BP Chairman Carl-Henric Svanberg are meeting today at the White House to discuss funding damage claims from the spill. The disaster was triggered by the April 20 explosion aboard the BP-leased Deepwater Horizon rig, which killed 11 workers and prompted the biggest U.S. oil spill.

“I’m glad that they’re finally getting a handle on it, but my heart sinks at how much this is,” said Ian MacDonald, an oceanographer at Florida State University in Tallahassee. He estimated the spill rate at 25,000 barrels a day on April 29, when the official estimate was 5,000 barrels a day. “This is a phenomenal formation that they drilled into.”

Photographer: Derick E. Hingle/Bloomberg

Oil floats in the water off the coast of Louisiana. Close

Oil floats in the water off the coast of Louisiana.

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Photographer: Derick E. Hingle/Bloomberg

Oil floats in the water off the coast of Louisiana.

$50.8 Billion

Exceptional Gulf of Mexico wells yield 30,000 barrels a day, MacDonald said yesterday.

Total cost of the spill may rise to $50.8 billion based on the higher leak estimate, Kevin Book, managing director at ClearView Energy Partners LLC, a Washington-based policy analysis firm, wrote today in a note to clients. The analysis assumes the leak continues through the end of August.

BP fell 5 pence, or 1.5 percent, to 337 pence at 4:35 p.m. in London, the lowest price in 13 years. It has fallen 49 percent since the explosion.

Obama said last night he will tell Svanberg the company must set aside “whatever resources are required to compensate the workers and business owners who have been harmed as a result of his company’s recklessness.”

The latest leak estimate was based in part on detailed pressure measurements in the prior 24 hours and more than a week of high-resolution video of the plume of oil spewing from the well, according to yesterday’s statement.

‘Better Data’

“The increased flow-rate numbers are a result of better data that bring together the work of several scientific teams representing the most comprehensive set of government estimates to date,” Kendra Barkoff, a spokeswoman for the Interior Department, said in an e-mailed statement.

On June 10 the same group, comprised of government and academic researchers, estimated the well was gushing 20,000 to 40,000 barrels a day, perhaps 50,000, before BP removed a damaged riser pipe from the well a week earlier.

Yesterday’s statement didn’t elaborate on whether the team concluded that removing the pipe to enable BP to begin recovering oil on the drillship increased the amount escaping from the leak.

ClearView’s cost analysis assumes oil spilled at the lower rate through June 3 before the riser pipe was cut and at the higher rate thereafter. The firm gave a range of potential costs, from $23.7 billion, assuming BP stops the spill July 31 to $50.8 billion should the gusher last until Aug. 31.

Toxic Compounds

Oil isn’t the only threat to the environment escaping from the well, said Florida State’s MacDonald.

“The emphasis has been on the discharge of oil, but at these rates, the discharge of gas has also been truly phenomenal,” he said. “That gas is dissolving below the surface, with the potential to reduce the amount of oxygen and carry forth huge amounts of benzene and other toxic compounds.”

BP resumed collecting oil yesterday afternoon aboard the drillship Discoverer Enterprise after recovery was interrupted for five hours by a fire, Robert Wine, a company spokesman, said yesterday in an e-mail.

Oil also is flowing to the second vessel, the drilling rig Q4000, through a separate line and crew are working to increase recovery by both vessels as much as possible, BP said today. The two vessels may capture as much as 28,000 barrels a day, BP said.

Capturing Oil

BP captured about 10,440 barrels oil yesterday, the company said on its website. That is a decline from the 15,420 barrels of oil the company captured June 14.

The company plans to boost its recovery capacity to 53,000 barrels a day by June 30 and 80,000 barrels a day by mid-July, according to a June 13 report it submitted to the Obama administration. It is drilling relief wells to permanently seal the leak. These will be completed no sooner than August.

BP had no comment on the new spill rate estimate, Wine said. Earlier projections were “presented as just estimates with a wide margin of uncertainty,” he said.

The new estimate isn’t final, U.S. Geological Survey Director Marcia McNutt, leader of the flow rate technical group, said yesterday. “We will continue to revise and refine,” she said.

To contact the reporter on this story: Jim Polson in New York at jpolson@bloomberg.net

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