Monday, November 29, 1999

No end in sight to spill as BP costs mount

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BP Plc said on Monday it had incurred $350 million in costs so far from the huge oil spill in the Gulf of Mexico as fears mounted of a prolonged and growing environmental and economic disaster.BP was considering its next move to contain the spill after its most promising short-term remedy struck a snag over the weekend.Its shares fell about 1 percent in early trade in London against a 2.5 percent rise in the European oil sector index. BP's value has been savaged by investors since the crisis erupted last month.The uncontrolled spill, which could become the worst in U.S. history, is expected to drift farther west, away from Florida's popular beaches but into the important shipping channels and rich seafood areas off the central Louisiana coast, west of the Mississippi Delta.The environmental group Greenpeace issued an unconfirmed report late on Sunday that traces of oil had been found onshore at Port Eads, the southernmost point of Louisiana, which is accessible only by boat or helicopter.BP said in a statement its costs so far included spill response, containment, relief well drilling and payments to Gulf Coast states to speed up their response plans.The final bill could be much higher than many analysts predicted as at least 5,000 barrels (210,000 gallons/795,000 litres) of oil a day have been gushing unchecked into the Gulf since the Deepwater Horizon rig exploded on April 20, rupturing the well and killing 11 crew members.The spill threatens economic and ecological disaster on Gulf Coast tourist beaches, wildlife refuges and fishing grounds across four states. It has forced President Barack Obama to rethink plans to open more waters to drilling.The National Oceanic and Atmospheric Administration projects that, with brisk onshore winds expected from the southeast, the points of potential contact of the spill with the mainland will multiply between now and Wednesday.The two Louisiana parishes directly west of the delta declared states of emergency on Sunday in anticipation of a battle to keep oil from coming ashore. Additional staging areas for the spill response have been set up in that area.Fishing is suspended in parts of the Gulf waters and much of the Louisiana coast. Many tourists have been scared away by reports of reddish, putrid water offshore, even though the coast is currently unaffected."You wait all year for your vacation -- you don't want to spend it in what you perceive is going to be a cesspool," said Gary Bratt, owner of a company that rents beach equipment on Alabama's Dauphin Island.For an Insider TV report, click http://link.reuters.com/gen92kFor a related graphic, click http://link.reuters.com/xeh23kBP is exploring several new options to control the spill after its 98-ton containment chamber, which took about two weeks to build, encountered problems on Saturday.A buildup of crystallized gas in the dome forced engineers to delay efforts to place the huge containment device over the rupture and funnel leaking oil to a waiting drillship."We're gathering some data to help us with two things. One is another way to do containment, the second is other ways to actually stop the flow," BP Chief Operating Officer Doug Suttles told Reuters in Venice, Louisiana.CONGRESSIONAL HEARINGSTop officials from BP and some of the other companies associated with the ruined Deepwater Horizon drilling platform are expected to get a grilling at congressional hearings on Tuesday and Wednesday.The U.S. Coast Guard and the U.S. Minerals Management Service also plan an investigation into the drilling rig's sinking, starting in Kenner, Louisiana, on Tuesday.BP Chief Executive Tony Hayward told London's Sunday Telegraph it could be weeks or even months before the spill is brought under control. He said the company could spend $10 million a day on cleanup efforts.Efforts to close valves on a failed blowout protector have also been scrapped. Conducting operations a mile (1.6 km) below the ocean's surface are complicating relief efforts as engineers work with remote-controlled vehicles in the inky blackness of "inner space.Delays in getting the containment dome up and running increase the chances the leak could become the worst U.S. oil spill, surpassing the 1989 Exxon Valdez disaster in Prince William Sound, Alaska.Rougher seas threaten to curtail containment activities in the next few days, including controlled burns, the laying of boom and spreading of chemical dispersant.The spill's major contact with the shoreline so far has been in the unpopulated Chandeleur Islands off Louisiana, which is a mostly a wildlife reserve and bird sanctuary.(Additional reporting by Anna Driver in Houston; Tom Brown and Pascal Fletcher in Miami; Steve Gorman on Dauphin Island, Alabama; Don Pessin in Venice, Louisiana; and Tom Bergin in London; Writing by Ros Krasny; Editing by Peter Cooney)

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