BP offers ray of hope: First relief well could be complete by end of July, ahead of schedule

By Tom Breen, AP
Thursday, July 8, 2010

First relief well could be complete by end of July

THEODORE, Ala. — BP and the federal government are offering a ray of hope in a summer of setbacks for crews trying to stop the gulf oil spill: The first of two relief wells could be done by the end of this month, weeks ahead of schedule.

But officials are quick to say that meeting such an optimistic timetable would require ideal conditions every step of the way, something that has rarely happened since the gusher began more than 2½ months ago a mile below the water’s surface.

It would not be the first time that BP’s efforts to stop the leak have fallen short. So is BP setting itself up for failure again?

“BP’s credibility is basically shot,” said Jefferson Parish Council Chairman John Young. “I hope they plug it as soon as they can, but I’m not holding my breath. They’re unreliable and they haven’t been transparent or open.”

Several times in the past week, BP Managing Director Robert Dudley has said drilling for a relief well is making fast progress and could be done before August.

But he’s quickly made a caveat: Everything would have to go flawlessly, something he considers unlikely especially during hurricane season.

“In a perfect world with no interruptions, it’s possible to be ready to stop the well between July 20 and July 27,” Dudley told The Wall Street Journal. He made similar remarks to the Houston Chronicle in a story published July 2.

Retired Coast Guard Adm. Thad Allen, the Obama administration’s point man on the crisis, has confirmed that the operation is ahead of schedule, but he won’t budge from the expected August completion date.

“There are certain things that can move that date up, but my official position is the middle of August,” Allen said Thursday.

BP originally thought the work would be done even earlier. In a permit filed in April with the U.S. Minerals and Management Service, the company predicted the relief well would be finished by July 15.

The relief well is currently the best hope for stopping the leak. Allen said Thursday it is expected to intercept and penetrate the pipe from the Deepwater Horizon rig about 18,000 feet below sea level in seven to 10 days. The drilling crew is attempting to hit a target the size of a dinner plate at a depth where water pressure is great enough to crush a submarine.

But crews will not know how long it will take to stop the oil until they get there. Because the gushing well essentially is composed of pipes within pipes, oil could be coming up through multiple layers, Allen said.

The plan is to inject heavy mud and cement into each layer of the pipe, if needed, to overcome the pressure of the huge oil reservoir below.

Meanwhile Thursday, the Obama administration asked BP to describe its plans to speed up the connection of a new containment vessel and cap at the well site to collect more of the spewing crude. A short window of good weather is expected over the weekend to get it done.

The possibility of a July finish for the relief well might boost the company’s stock price in the short run, but the oil leak is such a costly catastrophe that longer-term gains are harder to project.

For the region, the bottom line remains the same: An estimated 68 million to 169 million gallons of crude have gushed into the Gulf since April 20. And a few days’ difference matters less than the prospect of stopping the leak for good.

The gushing oil leak began April 20 after an explosion destroyed the drilling rig and killed 11 workers.

BP and federal officials have reported steady drilling progress for days. But Allen found himself having to discourage speculation about a July 27 completion date after Dudley’s comments.

Company spokesmen said Dudley’s remarks were not new, but reflected the likely schedule under ideal circumstances.

“That’s the absolute best-case scenario,” spokesman Daren Beaudo said.

As the drill gets closer to the well pipe, the work becomes more delicate, and any mistake becomes nearly catastrophic. That’s why Allen and BP are sticking to August as their target.

“If it happens sooner than that, I think we can all jump for joy,” he told reporters Thursday.

Weather is another factor. Drilling has not been stopped by the choppy seas and brisk winds that have bedeviled some of the cleanup and containment operations on the Gulf. But a major tropical storm or hurricane nearby would shut drilling down.

“We’re a bit ahead of schedule, but it just takes one storm to change that,” BP spokesman Scott Dean said.

Shaving even days off the mid-August timeline would stop millions of gallons of oil from escaping into the Gulf, but its effect on BP’s immediate fortunes is less clear.

The company’s stock has nearly achieved a second consecutive weekly gain as the wells get closer to the leak. BP also plans to report its second-quarter earnings July 27, one of the dates that’s been floated as a possible target for completion of the wells.

Whether the drilling is complete by July or August may not make much difference to investors, said Bruce Bullock, director of the Maguire Energy Institute at Southern Methodist University.

“I’m sure it will give them a little bump in their stock price,” he said of the possibility of an earlier completion. “But two weeks one way or the other is pretty much baked into a lot of investor expectations at this point.”

Those investors are counting on the relief well being the final fix, but there are backup plans, Allen said Thursday.

“I think we’ve found out so far you need a backup to the backup if you can in responding to this crisis,” he said.

One backup considered by BP is using a pipeline to transfer oil from the Deepwater Horizon site to non-producing wells within two to 10 miles away.

“They’d actually divert that flow into those pipelines and run it across the floor of the Gulf of Mexico into wells that are not producing now,” Allen said. “That would take some construction and some time. It would probably move us into the late August timeframe.”

Donald Van Nieuwenhuise, a University of Houston geology professor who has worked as a lead geologist on several offshore drilling projects, said transferring oil to nearby non-producing wells would take time but would avoid the need for surface vessels and possible storm interruptions.

Van Nieuwenhuise said the process is a variation on a common procedure.

“It’s easy,” he said. “It’s just not quick. You have to put more equipment on the (sea) floor.”

But the idea outlined by Allen apparently calls for storing the oil with gas and water from the gushing well in a different well so it could possibly be separated and removed at a later date, according to Van Nieuwenhuise.

“Producing the oil now is not something they need to be worried about while they’re trying to get oil out of the Gulf,” he said.

Breen reported from New Orleans. Associated Press writers Vicki Smith and Greg Giuffrida in New Orleans, and AP Energy Writer Chris Kahn in New York also contributed to this report.

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