BP: Spill Recovery Rate Steady Friday; Work On New Cap Eyed

The rate of oil recovery from the broken Macondo well in the Gulf of Mexico held steady Friday at a little under 25,000 barrels, BP PLC (BP) said Saturday, half a day after the federal government cleared the British oil giant to start work on a new system designed to recover all of the oil gushing from the leak.

In an update on its website, BP said 16,540 barrels were collected and 8,250 barrels flared off vessels on the sea's surface. Scientists have estimated that between 35,000 and 60,000 barrels of oil are flowing each day from the leak, sprung in late April when Transocean Ltd.'s (RIG) Deepwater Horizon rig burned and sank. Engineers are working to bring online as early as Sunday a third containment vessel, the Helix Producer, to eventually boost the collection rate to about 53,000 barrels a day.

Meanwhile, BP may be starting work as early as Saturday on the installation of a new containment system that could capture and send to the surface all of the oil leaking from the mile-deep well. The federal government's chief coordinator of the spill-recovery effort, Ret. Coast Guard Adm. Thad Allen, late Friday said he approved BP to go ahead with this work, even though it will require engineers to remove the cap that's in place now, allowing the amount of oil pumping into the Gulf to increase temporarily.

"I validated this plan because the capacity for oil containment when these installations are complete will be far greater than the capabilities we have achieved using current systems," Allen said in a press release Friday night. Allen said he approved the work because the weather in the Gulf is expected to be favorable over the next week or so, adding he expected the installation of the new system to take seven to 10 days to finish.

A spokeswoman for BP in Houston declined early Saturday to confirm whether engineers had begun the process to install the new system, called a "capping stack."

-By Mark Long, Dow Jones Newswires; 212-416-2145; mark.long@dowjones.com

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