BP claims the containment dome plan has been shelved and they are weighing other options for fixing the leak. At this point it is probably more like plan H for "somebody Help us" because all prior plans have failed.
The 78-ton containment box program has been shelved and the box has been moved to a storage location 1600 feet from the well. The containment box failed because the rapid formation of ice from gas hydrates clogged the exit pipe almost immediately after the box was placed over the leak.
(BP) is rapidly constructing a second containment box that will be significantly smaller and have a much larger "top hat" or exit pipe that they hope will not be clogged by the rapid formation of hydrate ice.
They are also working on a plan to tap directly into the leaking riser and pump the oil directly to the surface without it being exposed to the seawater. They have not yet figured out how to tap into the riser but with more than 100 scientists and engineers the odds are good they will figure out something. The problem is not in cutting through the riser but in making sure they don't make the problem worse by eliminating the backpressure in the bent and twisted riser that is currently keeping the flow of oil to only 5,000 bpd. The problem is also complicated because the solution must be implemented by robot subs 5,000 feet down.
There is also more talk about a top kill shot on the blow out preventer or BOP. They are working on a way to remove a valve and replace it with a fitting that will allow them to pump in bits of rubber and concrete that will clog up the leaking BOP and prevent oil from getting into the riser. The problem with removing the valve is that it will allow pressure in the well to vent into the sea right from the source. If the pressure is too extreme they might not be able to put a new valve in its place and the leak could intensify.
BP has no viable option but to continue to experiment until they find something that works. The costs for cleanup are increasing daily and tar balls are now starting to wash up on beaches and pictures are making their way onto national TV.
Suits are multiplying and the U.S. Justice Dept is now exploring potential malfeasance or misfeasance in the explosion and leak. Lawmakers are trying to win election points by taking shots at regulators and enforcement agencies claiming BP could face criminal charges if it is found they were not proactive in well safety. Senators are raising the volume on "big oil" and the "free ride" they have had for decades in the gulf. Obviously it is politically correct to bash big oil with the major spill on every newscast.
The Coast Guard has officially named both BP and Transocean (RIG) as responsible parties in the incident even though Transocean had no official responsibility. That is like saying Hertz is responsible if somebody has an accident in a rent car. The driver is responsible and Hertz has liability insurance for any backlash. In this cash BP is the responsible party and Transocean has a very large insurance policy for any backlash but legally BP has agreed to indemnify Transocean for all claims. Kind of tough to get around those clauses in the Transocean contract. Legally U.S. law also places 100% of the cleanup costs on the operator of the well NOT the drilling rig. That would be BP, Anadarko and Mitsui.
That has not stopped lawyers from filing over 100 suits, many class actions against everyone involved in the disaster. That is BP, Transocean, Anadarko (APC), Mitsui, Cameron (CAM) and Halliburton (HAL). Those are some seriously deep pockets and I am sure the lawyers are going to make a fortune even if they never win a dime. All of those companies have been summoned to Capitol Hill to testify on the 12th.
Cameron International (CAM) has been keeping a low profile but the failure of the BOP is going to be on the top of everybody's list of problems. Cameron has annual revenue of more than $5 billion and is the king of the BOP business. They have BOP devices on more then 400 active rigs around the world. If you have a safety device that costs millions and its sole purpose is to shutoff the well in the case of a blowout then a failure of that valve should be a big liability for the manufacturer.
In 2004 an engineering study done for federal regulators said only 3 of 14 new devices could actually shear the drill pipe and close the well in an event of breach. Only half of the operators taking delivery of a new device actually tested the pipe shear function. Two years later a trade journal claimed that the current generation of BOPs could not reliably shear the pipe because of the tougher high strength drill pipe being used in deepwater applications. Since the BOP on the Horizon was manufactured in 2001 and depths drilled and pipe toughness have both increased since 2001, Cameron may have an escape route in the suits. They can claim the device was not rated for the heavier pipe and BP/RIG should have known this.
There are also a lot of questions about the Halliburton cement job. Almost daily there are new articles in print claiming there were problems and the technique used may not have been the right one. Obviously the cement job failed so Halliburton has already got a strike against them when the court battles start.
These cases are likely to run for years and the oil companies can outlast and out maneuver any plaintiffs that don't have staying power. That staying power is directly related to the amount of money the plaintiffs can continue to pour into the cases without any guarantee of getting anything in return. When lawyers fees can run into the millions there are quite a few cases that will disappear well before any court decision. This is going to be ugly and it will take years.
The cases that won't go away are the ones brought by government agencies for cleanup costs. When tax dollars are being spent on legal fees there is a bottomless pit of resources. BP would be wise to settle these quick and then fight the compensation cases.
Estimates continue to rise on the potential BP exposure. The average guesstimate is around $15 billion with high ranges in the $25-$30 billion range. This would be a showstopper for BP and a fatal blow to APC and CAM.
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