BP has successfully placed a containment cap over the main pipe from the leaking oil well in the Gulf of Mexico. Oil and gas are now being routed to the Discoverer Enterprise ship on the surface, says the oil company.
However, Thad Allen, National Incident Commander for the ongoing oil spill disaster, says “it will be sometime before we can confirm that this method will work and to what extent it will mitigate the release of oil into the environment”.
It may still take the drilling of ‘relief wells’ to bring a final end to oil leaking from the well following the explosion that sank the Deepwater Horizon drilling rig. There are currently two relief wells being drilled. The first was started on 2 May and the second on 16 May and both will take around 3 months to complete, says BP.
In other news, company chairman Carl-Henric Svanber has ducked suggestions that BP should not pay a dividend to shareholders until a proper assessment of the cost of the Gulf mess has been made.
“It remains our aim as always to strike the right balance for shareholders between current returns through the dividend, sustained investment for long term growth and maintaining a prudent gearing level,” he said today. “We fully understand the importance of our dividend to our shareholders.”
A decision will be taken in July, Svanber says (BBC). The company’s shares have bounced up, although this could just as well be down to the containment cap as to the dividend talk (Reuters).
More Deepwater Horizon News
Today, driven by strong winds and weather, oil impacted the Queen Bess Island Pelican Rookery which resulted in 60 birds, including 41 pelicans being coated with oil.
“BP has ruined the island, our way of life, and our tranquillity. There isn’t any money in the world that will make up for what they have done. They can’t bring back our lives.”
Vickie Connoly, owner of the Pelican Pub on Dauphin Island, tells Reuters that locals’ idyllic way of life may be gone forever.
The insurance industry could be among the few winners from the Gulf of Mexico oil spill and the volcanic ash disaster, which have the dual benefit of being relatively light in claims costs but may still give insurers an excuse to raise premiums for some types of cover.
Insurers are charging 50 percent more for policies covering oil rigs in deep water after an explosion on a BP Plc-leased platform in the Gulf of Mexico triggered the worst spill in U.S. history, Moody’s Investors Service said.
Image: oil collected by Coast Guard Cutter Cypress on 31 May / US Coast Guard photo by Ens. Michael P. McGrew.