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Jun 1, 2010 11:35 AM by Melissa Canone

BP lost billions more in market value

PORT FOURCHON, La. (AP) - BP lost billions more in market value
Tuesday when shares fell steeply in the first trading day since the
company failed to plug the worst oil spill in U.S. history, as
investors realized the best chance to stop the leak was months away
and there was no end in sight to the cleanup.
As hurricane season began on the fragile Gulf Coast, BP settled
in for the long-term. With the ambitious "top kill" abandoned
over the weekend, BP's hope to stanch the leak lies with two relief
wells that won't be finished until at least August. The company is,
however, trying another temporary fix to contain the oil and siphon
it to the surface by sawing through the leaking pipe and putting a
cap over the spill.
The cleanup, relief wells and temporary fixes were being watched
closely by President Barack Obama's administration. Obama planned
to meet for the first time Tuesday with the co-chairmen of an
independent commission investigating the spill, while Attorney
General Eric Holder was headed to the Gulf Coast to meet with state
attorneys general.
Obama's energy czar, Carol Browner, said she doesn't want to
guess the prospects for success on BP's containment cap.
Interviewed Tuesday on ABC's "Good Morning America," Browner
said, "I don't want to put odds on it. ... We want to get this
thing contained."
Browner also said she's concerned about the effect the hurricane
season, which began Tuesday, could have on ending the environmental
crisis.
To accommodate more than 500 workers hired to clean up the worst
oil spill in U.S. history, BP and several subcontractors have set
up floating hotels, or "flotels," made up of steel boxes
resembling oversized shipping containers and stacked atop barges.
At Port Fourchon, the oil industry's hub on the Gulf , a flotel
there is the only way to station workers in a massive shipyard
surrounded by ecologically sensitive marshes and beaches.
"There are no permanent residents here on the port," said
Dennis Link, a manager from a BP refinery who's handling logistics
at the 1,300-acre site that's easily accessible by ship, but
reachable on land only by a state road that snakes through the
bayous.
On Monday afternoon, the living quarters on the flotel sat
empty. Generators pumped in cool air and powered the lights, and at
the foot of each bunk sat a towel, washcloth and individually
wrapped bar of soap. If necessary, four tents on dry land nearby
can house 500 more workers. Workers will likely be trucked in on
the two-lane state road.
The accommodations on the barge are Spartan, but comfortable -
similar to military barracks. Each pod contains 12 bunks, with a
bathroom for every four. Per Coast Guard standards, each resident
gets 30 square feet of space in the quarters. The barge has 10
washers, 10 dryers and a kitchen, although food will be served in a
tent on land. The quarters are typically floated alongside offshore
oil rigs to supplement housing on the drilling operations.
Another flotel sits about 15 miles away, off Grand Isle, and BP
plans to establish them elsewhere along the coast.
Meanwhile, the company's share price, which has fallen steadily
since the start of the disaster, took a turn for the worse Tuesday,
losing 15 percent to $6.13 in early afternoon trading on the London
Stock Exchange.
That was the lowest level in more than a year. The shares have
now lost more than a third of their value, wiping some $63 billion
off BP's value, since the explosion at the Deepwater Horizon oil
rig six weeks ago.
BP said early Tuesday it had spent $990 million so far on
fighting and cleaning the spill, with multiple lawsuits for damages
yet to be tallied.
Cleanup efforts are being ramped up while BP tries the latest of
patchwork fixes, this one the cut-and-cap process. The risky
procedure could, at least temporarily, increase the oil flowing
from the busted well.
Using robot submarines, BP plans to cut away the riser pipe this
week and place a cap-like containment valve over the blowout
preventer. On Tuesday, live video feeds showed robot submarines
using a circular diamond saw to cut pipes at the bottom of the
Gulf.
"We are well into the operation to put this cap on the well
now," BP Managing Director Bob Dudley told NBC's "Today" show on
Tuesday.
BP failed to plug the leak Saturday with its top kill, which
shot mud and pieces of rubber into the well but couldn't beat back
the pressure of the oil.
The oil company also announced plans Monday to try attaching
another pipe to a separate opening on the blowout preventer with
some of the same equipment used to pump in mud during the top kill.
The company also wants to build a new freestanding riser to carry
oil toward the surface, which would give it more flexibility to
disconnect and then reconnect containment pipes if a hurricane
passed through.
Neither of those plans would start before mid-June and would
supplement the cut-and-cap effort.
The spill has already leaked between 20 million and 44 million
gallons, according to government estimates.
For the relief well to succeed, the bore hole must precisely
intersect the damaged well, which experts have compared to hitting
a target the size of a dinner plate more than two miles into the
earth. If it misses, BP will have to back up its drill, plug the
hole it just created, and try again.
"The probability of them hitting it on the very first shot is
virtually nil," said David Rensink, incoming president of the
American Association of Petroleum Geologists, who spent most of his
39 years in the oil industry in offshore exploration. "If they get
it on the first three or four shots they'd be very lucky."
The trial-and-error process could take weeks, but it will
eventually work, scientists and BP said. Then engineers will then
pump mud and cement through pipes to ultimately seal the well.
On the slim chance the relief well doesn't work, scientists
weren't sure exactly how much - or how long - the oil would flow.
The gusher would continue until the well bore hole collapsed or
pressure in the reservoir dropped to a point where oil was no
longer pushed to the surface, said Tad Patzek, chair of the
Petroleum and Geosystems Engineering Department at the University
of Texas-Austin.

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