BP Bringing in Equipment to Double Amount of Oil Caught From Leaking Well

BP Plc will put equipment in place this weekend that will allow the company to double the amount of crude being caught from its leaking Gulf of Mexico well.

BP has been using two vessels to capture an average of 25,000 barrels a day from the Macondo well. For the 24 hours ended at 12 a.m. today, 25,290 barrels were collected, BP said. The company plans to connect by July 8 the Helix Producer I floating platform, which can process as much as 25,000 barrels daily and can easily be disconnected in case of a hurricane.

The vessel was originally slated to begin this week. U.S. National Incident Commander Thad Allen said choppy waters associated with Hurricane Alex made it impossible for BP to connect. Alex, which came ashore in Mexico, pushed waves as high as 8 feet (2.4 meters) into the spill site.

“The weather has had an impact on this, and indications are that it’s going to calm down,” said Toby Odone, a spokesman for the London-based company. “We’ll be able to have the vessels out there. We will continue getting the equipment out on the site.”

Successful connection of the Helix Producer I will allow BP to collect 40,000 to 53,000 barrels a day, accounting for most of the leaking oil, according to government estimates. A U.S. panel commissioned to study the flow rate has said 35,000 to 60,000 barrels daily may be gushing from the well.

Photographer: Joe Raedle/Getty Images

The A Whale oil skimming rig is seen as it works to collect oil from the surface of the water near the Deepwater Horizon spill site. Close

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Photographer: Joe Raedle/Getty Images

The A Whale oil skimming rig is seen as it works to collect oil from the surface of the water near the Deepwater Horizon spill site.

‘Whale’ Test

The Coast Guard and BP are also conducting a 48-hour test of a Taiwanese skimming vessel, known as ‘A Whale,’ Coast Guard Petty Officer Ayla Kelley said in an interview today. The results from this “proof of concept” will determine if the vessel will be used to capture oil from the spill. The vessel, a modified oil tanker, takes in oiled seawater, separates the crude, stores the oil and returns the water to the sea.

Increasing the collection rate may allow scientists to gauge a more accurate flow rate, said Brian Youngberg, an analyst at Edward Jones in St. Louis, who has a “sell” rating on BP’s shares.

“Is this leak 50,000 barrels or 75,000 barrels, or what?” Youngberg said. “The more they collect, it just helps get everyone a better feel for how much it is.”

Connection of the Helix Producer I follows a model BP has already used in connecting the Q4000, a vessel that is currently collecting crude, said David Pursell, a managing director at Tudor, Pickering Holt & Co. in Houston.

“The mechanics of getting a mirror-image set-up is pretty easy,” Pursell said.

‘Big Float’

The Helix Producer I will connect to a riser pipe that will link it to the seafloor, where it will plug into a manifold pipe-collection system. That will then take crude from lines running out of the blowout preventer, a five-story tall stack of safety valves.

Unlike the Q4000, a rig that’s already been capturing oil at the site, the Helix Producer I will use a buoy to link to the riser pipe, making a disconnection in the event of a hurricane or major storm easier, said Pursell.

“What is more optimal is to have a big float on top of the pipe that sits 300 feet below the surface of the water,” he said. The pipe then connects through a hose to the ship.

If the ships that are currently in place need to pull away due to a hurricane, they need to leave earlier, Pursell said.

Hurricane Alex

While Hurricane Alex didn’t interrupt collection of crude from the Macondo well, there is more than a 40 percent chance of at least one storm passing by the well by the end of August, according to Risk Management Solutions Inc., a Newark, California-based consulting firm.

There is about a 13 percent chance a hurricane will pass directly over the slick, and a 7 percent chance that it will be an intense hurricane of Category 3 or higher on the Saffir- Simpson scale, Risk Management said earlier this week.

About 1 percent of oil production in the Gulf and 2 percent of natural gas output remain idled in the wake of Alex, the earliest hurricane of the Atlantic storm season since 1995, the U.S. government said today.

Oil and gas producers report two rigs and 15 production platforms are still empty of workers who were evacuated ahead of the storm, the Bureau of Ocean Energy Management, Regulation and Enforcement said in a statement on its website. About 18,000 barrels of daily oil production remain shut-in, along with 133 million cubic feet of gas. Yesterday, about 13 percent of oil and 11 percent of gas production in the Gulf was reported as shut.

Larger Cap

The Helix Producer I and Q4000 are owned by Houston-based Helix Energy Solutions Group, Inc., which also builds subsea equipment and operates natural-gas and oil properties.

In several weeks, BP plans to connect a larger cap, which will enable it to capture as much as 80,000 barrels a day of crude. Installing that cap requires federal approval, which is still pending, said BP’s Odone.

Ultimately, a relief well will be used to pump mud and cement to permanently seal the leaking one, Allen said yesterday. That effort is still on track for completion by mid- August, he said. The well is within 600 feet (182 meters) of intercepting the leak, he said.

BP has drilled the well to a depth of 17,500 feet and has about 600 feet to go, Odone said today. A second relief well that will serve as back-up is at 13,800 feet, he said.

To contact the reporters on this story: Jessica Resnick-Ault in New York at jresnickault@bloomberg.net

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