Worst Oil Leak in History is Costing BP £6.5m a day

In 25 years of deep water drilling the oil industry has never seen such a catastrophic event like the one BP is dealing with now. The failure of the ultimate safety system that every drilling operation must have is what caused which looks like the worst environmental disaster in American history.

So far BP’s Gulf of Mexico spill has cost the oil giant £350m, however, the final bill is likely to be much higher thanks to the 5,000 barrels of crude pumped daily into the sea.

With crude oil dealing at around 78 US dollars per barrel, BP is loosing 390,000 US dollars per day only with the oil leak. Add to that another $10m daily clean up bill instead of the initial $6m a day revealed last week.

Right now BP’s priority is to minimise the impact of the situation. Over the weekend attempts to put a giant cap over the leak failed because ice-like crystals clogged the cap’s top when it was over the leak and now engineers must wait before they can try again.

BP’s chief executive Tony Hayward admitted he wasn’t confident that the dome would work. This so called “dome” is designed to collect oil from leaks and it can be siphoned off at any time but it had never been used at such deep levels.

“The oil industry has been drilling wells in deep water for 25 years, drilling 5,000 plus wells, maybe 10,000, around the world and this has never occurred. It was a catastrophic event,” said Mr Hayward.

Despite failures in attempts to stop the leakage, the oil company’s Chief Executive is confident they will fix this catastrophic problem any time soon.

“For sure we will fix it; it’s simply a matter of time. Clearly, the sooner the better, but we will fix it, that’s certain.” stated Mr Hayward.

The spill may lead to tighter rules on offshore oil exploration which will consequently lead to higher crude oil prices and a reduction in investment on the sector.

BP is not the only company quantifying the losses. Two companies, Lancashire Holdings and Catlin, said their losses caused by the sinking of Transocean’s rig two weeks ago could be the worst in history. JP Morgan estimates that the incident may cost insurers $1.6bn, approximately £1bn, and lead to an overhaul of the relationship between insurance companies and the oil industry.

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1. [...] This post was mentioned on Twitter by Energy Broker. Energy Broker said: New blog posting, Worst Oil Leak in History: – http://www.catalyst-commercial.co.uk/blog/?p=1475 [...]

   Pingback by Tweets that mention Worst Oil Leak in History is Costing BP £6.5m a day -- Topsy.com — May 10, 2010 @ 2:18 pm

2. worst environmental oil disaster in American history…

   This is getting out of control now, they need to do something about this and quickly, before it gets any worse….

   Trackback by pligg.com — May 11, 2010 @ 8:44 pm

3. Worlds worst oil leak ever…

   and despite this, they are still pushing ahead for further new sources of gas. You think they would learn from their mistakes….

   Trackback by share-news.net — May 14, 2010 @ 1:05 pm

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