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Thursday, June 3, 2010

BP 'cuts pipe from leaking oil well'

Page last updated at 18:31 GMT, Thursday, 3 June 2010 19:31 UK

    Oil company BP says it has cut a ruptured pipe from the leaking Gulf of Mexico oil well, a key step in the latest effort to cap the well.
    BP chief Tony Hayward hailed it as an "important milestone" and said BP could know within the next 12 to 24 hours if the capping effort will succeed.
    For now, undersea robots are preparing the well head to receive the cap.
    President Barack Obama is to visit the gulf on Friday, his third trip there since the leak began six weeks ago.
    News of the trip came with the White House under increasing pressure to show the administration is in control of the response and clean-up efforts.
    Florida threat
    Adm Thad Allen, the US official overseeing the response effort, said BP used giant shears manipulated by undersea robots to snip off the end of the pipe, after a diamond-edged saw failed to do the job.
    The challenge is now to place a containment cap securely over the cut and stop the oil flow. The company hopes to collect the oil on a surface ship above the well.
    The latest news came after a sheen of oil from the spill was seen within 10 miles of the white-sand beaches of the Florida "panhandle" region.


    BP is attempting to siphon oil from the top of the blowout preventer, the set of failed valves on the seabed. The plan is to lower a cap onto the upper section of the blowout preventer known as the lower marine riser package (LMRP).
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    'Fair criticism'
    Meanwhile, BP said it would pay for the construction of six sand barriers off the coast of the US state of Louisiana.
    The barriers are designed to protect fragile wetlands from the huge oil slick that has leaked from the well.
    On Wednesday, Louisiana Governor Bobby Jindal announced that the White House had ordered BP to pay for the construction of the sand barriers. He was speaking at an emotional news conference after touring the wetlands.
    Mr Jindal has strongly criticised the Obama administration and BP over the past few days for being too slow to respond to the crisis.
    "Every day they wait, every day they make us wait, we're losing our battle to protect our coast," he said.


    • Profits in 2009: $13.96bn (£8.75bn)
    • Clean-up costs so far: $990m (£674m)
    • Estimated cost of sand barrier project $360m (£244m)
    • Dividend payment 2009: $10.5bn (£7bn)
    • BP scheduled to make a first-quarter dividend payment to shareholders on 21 June
    • At its worst BP saw 34% wiped off the company's value
    • Share prices on London Stock Exchange fell from a pre-disaster high of 655.4 pence to 429.75p
    Mr Jindal maintains the sand barriers would block oil from the fragile wetlands on the Louisiana coast, which scientists and officials say would be near impossible to clean once they become inundated with oil.
    In a statement, BP said it was "committed to implementing the most effective measures to protect the coastline of Louisiana".
    Meanwhile, BP chief executive Tony Hayward said it was "entirely fair criticism" to say his company was unprepared for the deep-water disaster.
    Plummeting share prices
    In an interview with the Financial Times newspaper, he said: "We did not have the tools you would want in your toolkit."
    Two Democratic senators have written to Mr Hayward urging him to suspend payments to shareholders worth $10bn until all costs of the clean-up and compensation are paid out.
    BP estimates that the disaster has so far cost the company approximately $990m in clean-up costs.
    The sand barrier project will push BP's bill to about $1.4bn.
    BP share prices have continued to plummet in trading on the London Stock Exchange, amid news the US justice department has opened several civil and criminal inquiries into the Gulf spill.
    Oil washes up on an Alabama beach
    Obama has used the disaster to urge Congress to pass a bill to overhaul US energy policy and end tax breaks for oil companies.
    The oil began leaking into the Gulf of Mexico on 20 April when the Deepwater Horizon drilling rig, leased to BP, exploded, killing 11 workers.
    BP is drilling two relief wells to permanently stop the leak but they are not expected to be completed until August.
    A "top kill" procedure, which had been considered the best hope for plugging the leak, failed over the weekend when engineers were unable to pump enough heavy mud into the well to staunch the oil flow.

    BBC graphic

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