The major players in the gulf oil spill with testify at open Senate hearings in Washington on Tuesday. In a pre release of prepared testimony BP is going to throw Transocean to the wolves in hopes of moving the spotlight off themselves.
BP's testimony says they have a team of 40 experts investigating the disaster and the focus is on why the blow out preventer failed. Note that they did not mention the failure of the cement job by Halliburton. Without a failure of the cement the BOP would never have been needed. By focusing on the BOP they will attempt to shift blame to Transocean.
Transocean's (RIG) prepared testimony claims the only thing investigators know for sure is that there was a sudden failure of cement, or casing or both. By focusing on the failure of the cement job it moves the blame back to Halliburton (HAL) and BP.
BP (BP) claims it has already paid out $350 million in cleanup expenses and in the testimony they will again promise to pay all "necessary" expenses. That is a key word just like "legitimate" expenses in prior press releases. BP is trying to prevent anyone who can sign their name from lining up to sue BP for frivolous and bogus charges. Good luck with that!
BP is rapidly working on multiple options to stop the leak. This clearly suggests they have no confidence in any of them.
They are going to try a new five-foot high containment dome within a couple days. The idea is to reduce the amount of water in the dome in order to reduce the amount of ice formation. Since the oil coming out of the well is hot they are hoping a much smaller dome space will allow that hot oil to warm up the enclosure and stop the ice problem.
Secondly they are going to attempt a "hot tap" where they cut into the riser closer to the well and attempt to divert the flow of oil into a new pipe that leads to the surface. This is a little trickier since cutting into the riser and pipe could actually release more oil if the tap is unsuccessful.
They are still talking about a "top kill" with a "junk shot" at the blow out preventer. They will try to inject a load of debris into the BOP in order to clog it up much like a stopping up a toilet.
Lastly they are considering either putting a new blow out preventer on top of the current one or replacing the current one entirely. This would be extremely dangerous because removing the BOP would allow the well to run wide open with as much as 60,000 bpd of oil while they attempt to replace the BOP. If they are unsuccessful in replacing the BOP the environmental damage would increase by a factor of 10 until the flow was stopped.
They are currently drilling a relief well, which has reached the 5,000-foot mark on its way to 13,800. A second relief well will be started this week. It took five relief wells to stop the runaway well in the Timor Sea.
The leak news continues to depress the stocks of the major players. However, the day they announce the leak has been stopped I expect BP and RIG to rise sharply. It will mean the end of the cleanup charges is in sight. Obviously the oil will continue to wander around the gulf for weeks but with no oil being added the problem will wind down as the oil dissipates and the clean up efforts come to a close. Be prepared for that announcement and use it as a buying opportunity not just on the major players but other drillers and energy stocks as well.
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