BP says two billion dollars spent on oil spill disaster

Gulf of Mexico rig worker makes safety charge: report
London (AFP) June 21, 2010 - A worker on the rig which exploded in the Gulf of Mexico claimed Monday he found a fault in a key piece of safety equipment weeks before the disaster, a British television report said. Tyrone Benton told the BBC the fault on the Deepwater Horizon rig was not fixed and instead the device, known as a blowout preventer, was shut down and a second one used. He told the BBC that repairing it would have meant stopping drilling work at a time when it was costing 500,000 dollars a day to operate the rig, the source of the massive oil spill.

Energy giant BP has said that rig owners Transocean were responsible for the piece of equipment, and Transocean says the device was tested successfully before the incident, the BBC reported. "We saw a leak on the pod, so by seeing the leak we informed the company men," Benton told investigative TV programme Panorama, which is being screened later Monday. "They have a control room where they could turn off that pod and turn on the other one, so that they don't have to stop production... they just shut it down and worked off another pod." The BBC also quoted petroleum expert Professor Tad Patzek of the University of Texas as saying: "That is unacceptable. If you see any evidence of the blowout preventer not functioning properly, you should fix it by whatever means possible."

by Staff Writers
London (AFP) June 21, 2010
BP has spent about two billion dollars (1.6 billion euros) in its response to the massive oil spill in the Gulf of Mexico, the company announced on Monday, sending its share price sliding once again.

"The cost of the response to date amounts to approximately 2.0 billion dollars, including the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid, and federal costs," BP said in an official statement.

The British energy giant also referred to the creation of a 20-billion-dollar fund "to satisfy certain obligations" arising from the oil spill, which was hammered out with US President Barack Obama on June 16.

"It is too early to quantify other potential costs and liabilities associated with the incident," the company added in its statement.

In response to Monday's news, BP's share price slid 3.5 percent to 345.30 pence in morning deals on the FTSE 100 index of leading companies, which was 1.19 percent higher.

On Friday, BP shares had soared as traders welcomed clarity over the group's costs and shareholder dividend suspension.

But its damaged public image was left in tatters after furious US lawmakers pilloried the energy giant's boss Tony Hayward on Thursday, accusing him of stonewalling on the causes of the Gulf of Mexico oil spill.

Hayward suffered another PR blow at the weekend for attending a yacht race in Britain. BP has announced that Hayward is handing over day-to-day management of the Gulf oil leak operation to another top manager, Bob Dudley, an American.

In its statement on Monday, BP also updated some of its response operations including operations to skim oil from the surface of the sea which have recovered in total about 558,000 barrels (23.4 million gallons) of oily liquid.

On the drilling of relief wells, BP said the first well has reached a depth of 15,936 feet, and the second one was at 10,000 feet. The company added however that it is still estimated to take about three months to complete both wells, putting the target date as August.

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BP chief plans trip to Russia to offer reassurances: report
London (AFP) June 21, 2010
BP chief executive Tony Hayward is planning a trip to Russia to reassure President Dmitry Medvedev the oil giant is not on the verge of collapse, the Financial Times reported Monday. Hayward will meet with Medvedev and tell him that BP can meet the cost of the liabilities from the Gulf of Mexico oil spill, said the paper, without citing a source. The timing of the trip has not been finalised ... read more

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