BP Plc said it may bring the largest oil spill in U.S. history to an end today after it plugs its ruptured Gulf of Mexico well with a final shot of cement.
The seal can be injected because a relief well that intercepted the outer casing at the bottom of the Macondo well on Sept. 16 encountered no complications, London-based BP said yesterday in an e-mailed statement.
After being triggered by an April 20 drilling-rig explosion that killed 11 workers, the spill tainted hundreds of miles of U.S. coastline, wiped out more than $70 billion of BP’s market value, brought new Gulf deep-water drilling to a standstill and cost Chief Executive Officer Tony Hayward his job. Injection of cement into the annulus, the space between the well’s steel casing and outer walls, will permanently plug Macondo.
“It’s going to put the final punctuation on this episode,” Nansen Saleri, chief executive officer of Quantum Reservoir Impact LLC, a Houston firm that advises companies how to improve production of oil and gas. “The well is already dead for practical purposes, but given its history, it’s much better to execute this extra insurance policy.”
BP has spent at least $8 billion responding to the spill. The well, located about 40 miles (64 kilometers) off the Louisiana coast, gushed more than 4 million barrels of oil into the ocean. No crude or gas has leaked since BP capped Macondo from above on July 15.
Weather slowed BP’s efforts to intercept the well. On June 25, the company said it would take a few weeks for the relief drilling to reach the level where it would enter Macondo.
Interception occurred Sept. 16 at 17,997 feet (5,485 meters) below the sea surface, BP said yesterday. The relief well drilling rig recovered contents of the annulus for analysis and will be used to gather additional information about Macondo, the company said.
“Seems like they are continuing to make progress,” said Victor Shum, a senior principal at consulting firm Purvin & Gertz Inc. in Singapore. “The expectation is that the final steps will come in due course.”
BP last week published a 234-page report on the causes of the explosion on the Deepwater Horizon drilling rig, saying that its own managers and contractors involved with the well made mistakes that contributed to the disaster. The company blamed many of the errors on Transocean Ltd., which owned the Deepwater Horizon, and on service providers, including Halliburton Co.
BP’s report concealed the well’s “fatally flawed” design, which “set the stage” for the explosion, Vernier, Switzerland- based Transocean said Sept. 8. The driller cited a series of cost-savings decisions by BP that added risk. Cathy Mann, a spokeswoman for Houston-based Halliburton, said the report had “substantial omissions and inaccuracies” and that BP dictated design and testing procedures for the well.
BP said in July it would increase asset sales to raise as much as $30 billion over 18 months to help pay for cleanup costs and liabilities from the accident. In June, the company agreed to create a $20 billion fund to pay for damages from the spill.
The company posted a record quarterly loss of $17.2 billion when it reported earnings on July 27 after booking a $32.2 billion charge related to the spill. BP delayed its third- quarter earnings report by a week to Nov. 2 because it needs extra time to account for the costs of the spill response.
BP fell 5.40 pence to 403.05 pence yesterday in London trading. The stock has dropped 39 percent since the rig blast.
Anadarko Petroleum Corp., based near Houston, has a 25 percent stake in Macondo. A unit of Mitsui Oil Exploration Co., which is 70 percent owned by Japan’s Mitsui & Co., holds a 10 percent interest. BP was operator and has a 65 percent stake.