BP’s costs over the Gulf of Mexico oil spill soared Monday above three billion dollars, while a giant Taiwanese ship provided hope of revolutionizing on-sea skimming operations.
“The cost of the response to date amounts to approximately 3.12 billion dollars, including the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid, and federal costs,” BP said. The latest estimate is far higher than the 2.65 billion dollars given by the energy firm one week ago.
BP’s share price has collapsed more than 50 percent since the Deepwater Horizon oil rig it leased sank on April 22, two days after a blast that killed 11 workers. After intense pressure from President Barack Obama over the worst ever US environmental disaster, BP agreed last month to suspend its shareholder dividend and create a 20-billion-dollar fund for costs arising from the spill.
BP is also selling non-core assets to raise 10 billion dollars, while international ratings agencies have downgraded the company’s credit worthiness. But Monday, spokesman Robert Wine discredited a Sunday Times report that the company was turning to rival oil groups and sovereign wealth funds from Asia and the oil-rich Middle East to fend off a possible hostile takeover bid.
“We have no current plans to issue new equity,” he told AFP. Nearly a week after Hurricane Alex swept through the region, bad weather continued to hamper the clean-up, keeping smaller skimming vessels tied up in harbors in the affected Gulf states of Mississippi, Alabama and Florida. Skimming and other operations have resumed in calmer seas off the coast of Louisiana, however.
Although there was no direct hit from Alex, this year’s first major Atlantic storm provided a reminder of the urgent need to clean up a disaster surpassed only by Iraqi troops’ deliberate release of crude in Kuwait during the 1991 Gulf War. A major boon to the clean-up effort could come in the form of “A Whale,” a giant ship converted by its Taiwanese owners into what they call the world’s largest oil skimming vessel.
Owners TMT Shipping Offshore say the ship can suck up to 500,000 barrels (21 million gallons) of oily water a day through its “jaws,” a series of vents on the side of the ship. By comparison, more than 500 smaller vessels in 10 weeks have only managed to collect some 671,428 barrels (28.2 million gallons) of oil-water mix between them.
Tests on the “A Whale,” which traveled more than half-way around the world from Taiwan to the Gulf, were ongoing and approval for it to start skimming operations could come as early as Tuesday. The US Navy’s MZ-3A Airship was expected to reach the Gulf Coast Tuesday to help detect oil, direct skimming vessels and search for wildlife threatened by the thick brown-orange mess.
And officials said disposal units known as Heavy Oil Recovery Devices (HORDs) are “greatly improving” clean-up operations. Up to 1,000 units were expected to be up and running in the coming weeks, with a focus on sucking up thick-heavy oil that has thwarted traditional skimming methods.
The fractured pipe that connected the BP-leased platform to the well a mile (1,600 meters) down on the seafloor has now spewed somewhere between two and four million barrels of oil into the Gulf. The firm’s current containment systems can only capture or flare some 25,000 barrels of oil a day, a number set to double when a third vessel is expected to be in place on Thursday. It will likely be mid-August at the earliest before the ruptured well is permanently capped by injecting mud and cement with the aid of relief wells.
New Orleans, Louisiana, July 6, 2010 (AFP)
