Coast Guard, Companies Work To Prevent Massive Gulf Oil Spill

The U.S. Coast Guard, Transocean Ltd. (RIG) and BP PLC (BP) are stepping up efforts to prevent a massive oil spill in the Gulf of Mexico after the sinking of a flaming drilling rig on Thursday.

When the Transocean rig Deepwater Horizon caught fire late Tuesday, it created a minor spill coming from a deepwater well in the Macondo offshore prospect, although most oil burned off. But U.S. Coast Guard Rear Adm. Mary Landry said in a press conference that the rig has "settled below the surface," which "obviously increases the potential for pollution" coming from the deepwater well.

Landry added that authorities don't know whether the subsurface well-head is still leaking oil and that a remotely-operated vehicle is currently surveying the area. There's currently no estimate of how much crude is coming from the well, she said. The Coast Guard is "actively engaged in preparing for pollution response," she said.

Currently, there's a one-to-five-mile oil-produced "rainbow sheen" in the surface of the sea surrounding the rig site, with a dark center that's presumed to be crude oil. It's likely that the sheen originated from the explosion which left 11 people missing and at least three critically injured, Landry said.

The search continues for the missing crew members, and the Coast Guard will continue to do so until for approximately another 12 hours, when the chances of survivability decrease, Landry added.

Transocean executive Adrian Rose said reports say the missing people may have been on board the rig "and not able to evacuate." But the company hasn't "confirmed that yet."

BP's head of exploration for the Gulf of Mexico, David Rainey, said the company is mobilizing a spill-response armada, including a drilling rig that could help fix the subsurface well if needed. Rainey added that the incident "certainly has the potential to be a major spill."

Transocean's Rose told reporters that the rig was preparing to abandon the well after finding hydrocarbons. BP's Rainey said that the prospect "was a discovery."

-By Angel Gonzalez, Dow Jones Newswires; 713-547-9214; angel.gonzalez@dowjones.com

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