BP’s Gulf battle echoes monster ’79 Mexico oil spill

* Striking similarities with Mexico’s Ixtoc well accident

* Mexico struggled for months to cap 1979 blowout

* Relief wells were no instant fix to disaster

By Robert Campbell

MEXICO CITY, May 24 (BestGrowthStock) – BP Plc’s (BP.L: ) race to cap
its ruptured oil well in the Gulf of Mexico is eerily similar
to a 1979 accident off the coast of Mexico that caused the
world’s worst oil spill.

In both cases natural gas flowed unnoticed into the well
being drilled, causing an explosion. In both cases a critical
piece of fail-safe equipment — the blowout preventer —
failed. And in both cases the operators struggled to quickly
staunch the flow of oil into the Gulf of Mexico.

BP’s shares have been battered in the month since its
Macondo well blew up, threatening tourism, fishing and wildlife
along the Gulf Coast and landing the British oil giant with a
multibillion dollar clean-up tab.

But while Mexico’s Ixtoc well was only 150 feet (50 metres)
below the sea surface, Macondo lies at the crushing depth of
5,000 feet (1,524 metres), forcing the company to use robots to
do all undersea work.

Experts have warned that the well may not be capped until
relief wells are completed two months from now, by which time
the spill could be bigger than the Exxon Valdez disaster, which
spilled an estimated 257,000 barrels of oil (10.8 million
gallons/(40.9 million liters).

But it would still not surpass the extent of the disaster
caused by the Ixtoc spill, which belched crude oil for 297
days, dumping nearly 3 million barrels (126 million gallons/477
million liters) of oil into the southern Gulf of Mexico, some
of which eventually washed up on the Texas coast, according to
Pemex.

And the experience of Mexico’s state oil company Pemex
[PEMX.UL] shows that relief wells are no silver bullet.

Ixtoc, off the coast of the southeastern Mexican state of
Campeche, continued to leak oil more than three months after
Pemex completed its first relief well.

LESSONS “UNKNOWN”

Pemex never revealed the exact cause of the accident and as
recently as 2007, Jan Erik Vinnem, an offshore risk management
specialist at Norway’s University of Stavanger, wrote that the
lessons learned from the disaster were “unknown.”

Pemex pumped cement and salt water into Ixtoc for months
before finally bringing the runaway well under control and
sealing it with cement plugs.

Pemex’s scramble to come up with other solutions while the
relief wells were being drilled will sound familiar to those
who have followed BP’s efforts to stop the oil gushing out of
its ruptured well.

Divers tried to manually operate the blowout preventer but
this effort was unsuccessful and over the next several months
Pemex tried a variety of solutions, including a plan to force
metal spheres into the well to cut the flow of oil and lowering
a steel structure over the spill to capture the crude.

BP is trying similar schemes but the huge water depth it is
operating at is vastly complicating its efforts.

The robots used by BP have been unable to get the blowout
preventer to work and BP abandoned an attempt to cap its well
with a steel structure after natural gas hydrates accumulated
within the structure.

Executives even mulled shooting golf balls, pieces of tires
and other debris into the well to try and stop the flow.

The company now plans to attempt a “top kill” procedure
this week in an effort to stop the flow of oil by forcing heavy
drilling fluids into the well, but BP only gives the procedure
a 60 to 70 percent chance of success.

BP says the spill has already cost it $760 million and it
has promised to pay all legitimate claims for compensation,
which will likely carry the cost to billions of dollars.

Pemex spent over $100 million on the capping and cleanup
operations, but dodged most compensation claims by asserting
sovereign immunity against U.S. courts.

Investing Basics

(Reporting by Robert Campbell, Editing by Sandra Maler)

BP’s Gulf battle echoes monster ’79 Mexico oil spill