Even as British Petroleum (BP) reported tentative signs of success in its latest attempt to slow the powerful gush of oil from the Deepwater Horizon rig in the Gulf of Mexico, Coast Guard Admiral Thad Allen, leading the federal government's response to the spill, said this was a “siege that is going to go on for a long time”.
He added that the mop-up operations were spread from south-central Louisiana to Port Saint Joe, Florida and they were “not going to end soon”. He went on to describe the situation in the Gulf as a “very, very, very tough problem”.
The Deepwater Horizon rig operated by BP, sank on April 22 following an explosion that killed 11 workers.
Speaking to CBS news channel, Admiral Allen said the effort would be a long-term campaign that would last for several more months. “This will only end when we intercept the well bore, pump mud down it to overcome the pressure of the oil coming up from the reservoir and put a cement plug in,” he said.
Further Admiral Allen warned that even after such a procedure, there would be oil on the water and along the coastline for “months to come”. This would be well into the fall, he noted. In earlier statements he had also indicated that the digging of relief wells, to take the pressure off the damaged rig, could take until August.
Admiral Allen’s comments came as BP reported it had started drawing the oil to a ship on the surface by deploying a containment cap on the lower marine riser package. The company said the cap, installed on June 3, had collected a total of 10,500 barrels of oil by June 5 and transported them to the Discoverer Enterprise drillship. However official estimates place the leak somewhere between 12,000 and 25,000 barrels of oil a day.
In a statement BP added that 22 million standard cubic feet of natural gas had been flared.
Costs and liabilities
BP also announced that the cost of the response to date amounted to approximately $1.25 billion, including the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid, and federal costs. This did not include its costs for a Louisiana barrier construction project, which was estimated to be $ 360 million. "It is too early to quantify other potential costs and liabilities associated with the incident," BP said.
Visiting fishermen and others in local communities in Louisiana recently, President Obama had reiterated his administration’s commitment to get BP to compensate them for their loss of income and damage to their livelihoods.
Yet BP’s share price actually rose 2.7 per cent on Monday morning, reportedly in response to statements by its Chairman Carl-Henric Svanberg late last week that the company would aim "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, "We will do all we can to protect and grow the value of the company in which you have invested," and added, "We fully understand the importance of our dividend to our shareholders."