Gulf of Mexico oil spill continues to batter BP

[] — BRITISH oil giant BP said on Friday that the devastating Gulf of Mexico oil spill disaster has cost about $8bn so far.

“The cost of the response to date amounts to approximately $8bn, including the cost of the spill response, containment, relief well drilling, static kill and cementing, grants to the Gulf states, claims paid and federal costs,” BP said in a statement.

The April 20 spill was triggered when an explosion ripped through the Deepwater Horizon rig in the Gulf of Mexico, killing 11 workers and sinking the huge offshore platform two days later. The flow of oil into the sea was not fully stemmed until July 15.

BP has forecast that the worst environmental catastrophe in US history will cost the group a total of about $32.2bn dollars, after pushing the group into a record $16.9bn loss in the second quarter.

The company repeated that it had agreed in June to set up a $20bn compensation fund for residents affected by the spill.

BP added that operations were underway to replace the Deepwater Horizon’s damaged blowout preventer (BOP) – a large piece of equipment that failed to stop the disaster.

On Thursday, the group had removed the massive cap which had stemmed the flow of oil from its ruptured well deep in the Gulf of Mexico in a key step toward killing the well once and for all, officials said.

The damaged BOP will be raised to the surface to be examined and held as evidence in an official investigation, following the removal of the cap.

The ruptured Macondo well was plugged with heavy drilling fluid and then sealed it with cement last month, but the so-called “bottom kill” operation to permanently seal the well was delayed until the blowout preventer is replaced.

The “bottom kill” involves intercepting the crippled well with a relief well, which then pumps heavy drilling oil and cement into the oil well to permanently plug it.

BP said the replacement of the blowout preventer will “allow operations to complete the relief well to resume”.

The company hopes that the relief well will reach the damaged well by around mid-September, depending on weather conditions.

In early morning trade in Britain on Friday, the company’s shares rose 0.51 percent to 394.60 pence.

However, BP’s share price has collapsed as a result of the disaster, shedding about 40 percent in value since the explosion on April 20.

The catastrophe also sparked the resignation of BP CEO Tony Hayward in July.
Hayward was forced out following a string of gaffes as the public face of the firm in its battle to stop oil leaking into the Gulf of Mexico.