BP spill response price tag reaches $2bn

21 June 2010 14:40  [Source: ICIS news]

LONDON (ICIS news)--The Gulf of Mexico oil spill response cost has grown to $2bn (€1.6bn), BP said on Monday.

That cost included containment, relief well drilling, grants to US states, claims paid and federal expenses, BP said.

BP announced on 16 June the creation of a $20bn fund to pay claims for damages resulting from the oil spill.

About 11,050 bbl of oil was recovered on Friday and 25.6m cubic feet of natural gas was flared from the spill site, response officials said, which was less than recent averages because process facilities were shut down for part of the day.

Work on the first relief well, which began on 2 May, was continuing and it now had a depth of 15,936 ft, response officials said. A second relief well, which was begun on 16 May, was at a measured depth of 10,000 ft. Both wells were still estimated to take about three months to complete from the commencement of drilling.

Oil began spewing from the bottom of the Gulf after a 20 April explosion, which killed 11 workers, sank the BP-operated Deepwater Horizon offshore rig.

The BBC reported on Monday that a Deepwater Horizon rig worker said he had identified a leak in the oil rig's safety equipment weeks before the explosion.

The worker said the leak was not fixed at the time, but that instead the faulty device was shut down and a second one relied on, the report said.

Criticism has continued to rain on BP in the wake of the explosion.

The head of Anadarko Petroleum, which was an investor in the Deepwater Horizon, blasted BP on Friday.

"The mounting evidence clearly demonstrates that this tragedy was preventable and the direct result of BP's reckless decisions and actions,” said Anadarko chairman and chief executive Jim Hackett.

“Frankly, we are shocked by the publicly available information that has been disclosed in recent investigations and during this week's testimony that, among other things, indicates BP operated unsafely and failed to monitor and react to several critical warning signs during the drilling of the Macondo well,” he continued.

BP said it disagreed with Anadarko’s allegations. “These allegations will neither distract the company’s focus on stopping the leak nor alter our commitment to restore the Gulf coast,” said BP’s CEO Tony Hayward. “Other parties besides BP may be responsible for costs and liabilities arising from the oil spill, and we expect those parties to live up to their obligations.”

Moody’s Investors Services on Friday downgraded Anadarko’s long-term debt as a result of the spill, the energy company said.

($1 = €0.80)

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By: Brian Ford
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