BP starts crucial test on leaking Gulf oil well

By Kristen Hays

HOUSTON (BestGrowthStock) – BP Plc on Wednesday started a crucial test on its ruptured Gulf of Mexico oil well that could be a prelude for permanently halting flow from the runaway well after nearly three months.

Kent Wells, BP’s senior vice president of exploration and production, said undersea robots working a mile below the surface had started shutting a series of three valves designed to ultimately stop the oil flow completely.

BP began the process, which could stretch up to 48 hours, after getting the green light from top U.S. government officials who had delayed the plan by 24 hours citing concern that the test could irreparably damage the well.

Retired Coast Guard Admiral Thad Allen, the top U.S. official overseeing the spill response, said earlier on Wednesday that a closer analysis of the test reinforced confidence it would not exacerbate the leak.

The decision was taken after a day of intense deliberation that reached the level of President Barack Obama and his cabinet, underscoring the size of the stakes involved.

The disaster has soiled hundreds of miles of shoreline, shut down about one third of Gulf fisheries, put BP on the hook for billions of dollars in clean-up costs and legal liabilities and prompted Obama to temporarily halt deepwater drilling.

In Washington, the White House said that after discussions between BP and senior government officials it had been decided that “the test should now proceed with several modifications and safety requirements.”

The leak, which began after a deepwater rig exploded on April 20 killing 11 oil workers, is the worst offshore spill in U.S. history.

If the tests indicate that sealing the well might cause even further damage, the current capping device would stay in place and would become part of the system to capture the oil and siphon it to ships on the surface.

Nansen Saleri, former head of reservoir management for the world’s largest oil company Saudi Aramco, had told Reuters before the announcement that BP should forego the test and keep using surface vessels to collect leaking crude until a relief well intercepts and plugs the leak by mid-August.

“They already have a relatively robust remedial program in place. It’s the safe option,” said Saleri, now president and chief executive of Quantum Reservoir Impact in Houston.

While they waited for BP to move ahead, some investors sold off their shares but trade was thin as they watched to see what would happen.

“I think we’ve reached a wait-and-see point, it might be too late to take profits but it might be too early to buy the stock,” said Hugh Johnson, chief investment officer of Hugh Johnson Advisors LLC in Albany, New York.

In response, shares in BP ended 2.3 percent down in London in slow trade and were off about 1.9 percent in New York, with some analysts saying investors were likely cashing in profits ahead of further news on the new cap.

(Additional reporting by Richard Cowan, Timothy Gardner and Tom Doggett in Washington, Chris Baltimore in Houston and Matthew Lynley in New York; Writing by Ed Stoddard and Deborah Charles)

BP starts crucial test on leaking Gulf oil well