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Re: Stock Lobster post# 321717

Tuesday, 06/01/2010 8:04:59 AM

Tuesday, June 01, 2010 8:04:59 AM

Post# of 648882
BL: BP Needs Equivalent of Lottery Win in August to Seal Leak at First Attempt

By James Paton

June 1 (Bloomberg) -- BP Plc would need the equivalent of a lottery win to succeed with its first attempt to end the Gulf of Mexico oil spill in August using a so-called relief well, the president-elect of the American Association of Petroleum Geologists said.

A relief well intercepts the damaged hole at an angle thousands of feet below the seabed and permanently closes it with heavy mud and cement. The method is the surest way for BP to end the largest oil spill in U.S. history, yet initial failure is “almost a certainty,” the association’s David Rensink said by telephone from Houston. “It would be like winning the lottery to get it on the first shot.”

BP faces some of the same challenges PTT Exploration & Production Pcl encountered last year in trying to stop a leak 2,600 meters (8,500 feet) below the seabed off northwest Australia.

The Thai oil and gas explorer finally plugged the Montara well in the Timor Sea after 10 weeks when a relief well enabled the company to pump 3,400 barrels of heavy mud to stanch the flow of oil. During one of the failed attempts to halt the leak on Nov. 1, a fire erupted while the Bangkok-based company was injecting the mud, engulfing and destroying the West Atlas drilling rig.

BP forecasts it will finish the first of two relief wells it has started drilling in early August, according to Doug Suttles, the executive in charge of the spill response. The first well has reached a depth of 12,090 feet, London-based BP said today in a statement, two-thirds of the way to completion. A second has reached 8,576 feet.

‘Hit-or-Miss’

The challenge is intersecting the damaged well, not the actual drilling, said Rensink, who becomes president of the association in July.

“What you’re doing is trying to intersect a well bore that is probably roughly a foot across with another well that is about a foot across,” he said. “It’s a hit-or-miss sort of thing. Ultimately the relief well will work. It’s just a matter of time, of continuing to poke at it until you intersect it.”

BP is drilling two wells because there is a risk it may not reach the target with just one, said Edson Nakagawa, head of the petroleum and geothermal division of Australia’s Commonwealth Scientific and Industrial Research Organization.

“Drilling in this kind of environment is challenging with the deep water, deep wells, high pressure and high temperature,” Nakagawa said from Perth today.

Timor Sea

The cost of responding to the leak has risen to $990 million, BP said today. The well has spewed 12,000 to 19,000 barrels of oil a day, a U.S. government panel estimated May 27. The spill began after the Deepwater Horizon rig hired by BP exploded April 20, killing 11 crew members.

PTTEP estimated as much as 400 barrels of oil a day may have leaked into the Timor Sea between Aug. 21 and Nov. 3. That would make it the third-biggest spill in Australian history, based on figures from the Maritime Safety Authority.

“There are similarities between Montara and the Gulf” spills, said Brian Evans, head of Petroleum Engineering at Curtin University of Technology in Perth. “What really separates them is the deep water in Gulf of Mexico,” he said by telephone today. “They are dealing with much higher pressures than the Apollo missions had in space.”

A commission set up to investigate what happened at the Montara field, about 250 kilometers (155 miles) northwest of Australia’s Kimberley coast, is expected to issue a report and make safety recommendations in mid-June, Australia’s Resources and Energy Minister Martin Ferguson said last month.

To contact the reporter on this story: James Paton in Sydney jpaton4@bloomberg.net.

Last Updated: June 1, 2010 05:56 EDT

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