BP Starts To Install New Gulf Oil Spill-Containment System

BP PLC (BP, BP.LN) said engineers are starting work Saturday to install a new, tighter-fitting containment cap that could help allow the recovery of all the oil gushing from the Gulf of Mexico leak within two to three weeks.

Undersea robots are beginning the delicate task of removing the loosely fitting cap currently in place to prepare for the installation of a new sealing cap over the next four to seven days. Removal of the current cap will allow more oil to escape into the Gulf while a third containment vessel, the Helix Producer, is brought online in coming days. BP, with the approval of the federal government, is going ahead with work on the new sealing cap--even though the Helix Producer isn't fully online yet--to take advantage of a week's worth of expected calm weather.

"Over the next four to seven days, depending on how things go, we should get that sealing cap on," BP Senior Vice President Kent Wells said in a teleconference briefing Saturday. Over the next two to three weeks, "as we start to ramp up the additional containment capacity, we should see less and less flow.... The intent is to have the ability to contain all of the flow."

Wells said engineers are expected in coming weeks to bring the total oil recovery capacity to 60,000-80,000 barrels a day. Scientists have estimated that about 35,000 to 60,000 barrels a day are flowing from the mile-deep leak, sprung in late April when Transocean Ltd.'s (RIG) Deepwater Horizon rig burned and sank. The spill is among the biggest in U.S. history, and oil has fouled the shorelines of at least four states. Wells declined to estimate how much oil is flowing into the Gulf, but noted BP has in recent weeks been collecting between 24,000 and 25,000 barrels a day.

While the new cap could be able to contain all of the oil flowing from the broken Macondo well, BP and the government have always placed more faith in the ability of a relief well to finally plug and kill the leak. BP and the federal government are officially sticking by their forecast for a mid-August completion of the first of two relief wells. Some BP officials are more optimistic and hope to have it done by the end of July, according to the Wall Street Journal.

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

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