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BP's costs soar as storm delays oil containment vessel

US lawmakers demand major oil firms' emergency plans
Washington (AFP) June 28, 2010 - Senior US lawmakers on Monday pressed oil giants Chevron, ConocoPhillips, ExxonMobil and Shell to prove they are better prepared than BP was in the Gulf of Mexico to confront a massive oil spill. "No oil company appears to be better prepared for a disastrous oil spill than BP was," House Energy and Commerce Committee chairman Henry Waxman and the chairmen of two subcommittees wrote in letter to top executives at each firm. "Our view is that the moratorium on drilling new wells in the Gulf should be reinstated until the oil companies can demonstrate that their oil spill response plans are capable of protecting the Gulf region from another subsea blowout." A US judge ruled last week against President Barack Obama's six-month freeze on deepwater drilling in the Gulf of Mexico, a decision the White House immediately said it would appeal.

At a hearing earlier this month, the executives acknowledged that their emergency response plans were in large part similar to BP's plan for managing a major spill in the Gulf -- which events proved catastrophically inadequate. The lawmakers asked the oil firms to advise the committee no later than July 2 whether their oil spill response plans for the Gulf of Mexico were similar to the one at the blown out Macondo well, and explain how they reached their conclusions. They also asked whether the companies had resources or equipment available in the event of a spill that were not currently being used to respond to the disaster in the Gulf. And they asked whether the major firms planned to revise their emergency response plans and, if so, by when.
by Staff Writers
New Orleans, Louisiana (AFP) June 28, 2010
BP's costs soared as efforts to double the amount of oil being captured from a ruptured well deep in the Gulf of Mexico were stymied Monday by the first major storm of the Atlantic hurricane season.

Tropical storm Alex appeared set to sidestep the massive slick, but its strong winds threatened seas too rough to try to attach a third containment vessel to a riser pipe suctioning oil from a containment cap some 5,000 feet (1,500 meters) below the surface.

Rough seas could also push the oil deeper into fragile coastal wetlands and has already shifted parts of the slick closer to sensitive areas in Florida and Louisiana, said US Coast Guard Admiral Thad Allen, who is overseeing the response efforts.

"Any kind of a surge or a storm would obviously exacerbate the oil further into marshes, which would cause problems, and we're going to face that potential throughout the hurricane season," Allen told reporters Monday.

Even the threat of gale force winds will be enough to force the withdrawal of drilling and containment ships working at the spill site some 52 miles off the coast of Louisiana, Allen said.

Evacuations must begin 120 hours in advance, and operations will be shut down for about 14 days to "take down the equipment, move it off to a safe place, bring it back and reestablish drilling," Allen said.

That would delay the completion of relief wells designed to permanently plug the well until September, and would drastically increase the flow of oil still gushing into the sea some 70 days after the deadly explosion on the BP-leased Deepwater Horizon drilling rig.

The current containment system is capturing nearly 25,000 of the estimated 30,000 to 60,000 barrels of crude gushing out of the ruptured well every day.

The now-delayed vessel Helix Producer was set to increase containment capacity to 40,000 to 50,000 barrels per day by early July, but Allen did not provide a new estimated start date.

Earlier Monday, BP raised its costs over the oil spill to 2.65 billion dollars, an increase of about 300 million dollars over the weekend that means the energy firm is now forking out about four million dollars an hour.

The firm was also forced to deny reports its chief executive Tony Hayward was set to resign after weeks of taking flak for a string of gaffes and insensitive remarks over the disaster.

Hayward, who faced severe criticism from President Barack Obama, handed over management of the crisis last week to another senior manager, Bob Dudley, a seasoned BP trouble-shooter and Mississippi native.

Russian Deputy Prime Minister Igor Sechin, preparing to meet Hayward on Monday, said the British boss was to resign and present a successor, Russian news agencies reported.

But a BP spokeswoman insisted Hayward was not stepping down, telling AFP: "Tony Hayward remains chief executive and is not resigning."

Meanwhile, Tropical Storm Alex gained strength as it moved into the southwestern Gulf after dumping heavy rains across the Yucatan peninsula, having killed at least 10 people in Nicaragua, Guatemala and El Salvador.

On its current path, Alex is projected to make landfall in Mexico late Wednesday, with most of its force avoiding the oil spill area in the northeastern Gulf off the Louisiana coast.

But Bob Smerbeck, a senior meteorologist at AccuWeather.com, said the storm could still do significant damage if it lingers offshore and kicks up big swells that would dismantle containment booms and push oil onto land.

"The best-case scenario for the oil clean-up is that this thing heads right into the Mexican coast without waiting," he said. "The worst case is if it goes north -- and stalls."

Alex, which already packed sustained winds of 60 miles (95 kilometers) an hour, was "slowly intensifying," and is expected to become a hurricane on Tuesday, the Miami-based National Hurricane Center said.

"It looks like we're dodging the bullet right now," local environmentalist Aaron Viles told AFP, but noted that there were "six to 10 more bullets in the chamber," referring to the "hyperactive" hurricane season forecast for 2010.

Elsewhere, OPEC urged the United States on Monday to reconsider legal moves and ditch a ban on deep-water drilling slapped on the oil industry in the wake of the Gulf of Mexico oil spill disaster.

"We should not really ban it and we should not jump to conclusions without serious study," OPEC secretary general Abdullah al-Badri said after meeting with European Union energy chiefs in Brussels.

An estimated 1.6 million to 3.6 million barrels of oil -- or 67 million to 153 million gallons -- have poured into the Gulf since the BP-leased Deepwater Horizon rig exploded on April 20, killing 11 workers.

Vice President Joe Biden heads to the region on Tuesday and is due to visit the New Orleans command center before traveling to the Florida panhandle.



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