BP collecting 2,000 b/d of leaking Gulf oil

 By Gary Taylor, with Starr Spencer in Houston, Beth Evans in New York and William Bathurst, Robert Sheridan and Elza Turner in London

May 19 - BP declined May 18 to specify a new estimate for the volume of crude oil that continues leaking into the Gulf of Mexico at its runaway Macondo exploration well after adjusting for the successful diversion of 2,000 b/d through a procedure now siphoning that amount to a ship on the surface.

"We are just saying that we are working a 5,000 b/d leak and we know that 2,000 b/d are going into a ship," said a BP spokeswoman who refused to provide her name after accepting a phone call for information at the company's joint command center with the US Coast Guard in Robert, Louisiana.

BP announced success with its siphoning process May 17, when Doug Suttles, chief operating officer for BP Americas, told reporters he would be pleased if the riser insertion tool used for siphoning would increase its intake to as much as 2,000 b/d from the original mark of 1,000 b/d (ON 5/18). In a statement overnight, BP announced the previously untested procedure had reached the 2,000 b/d level.

But the spokeswoman refused to provide any new estimate for the amount of oil leaking into the Gulf with the siphoning device in operation. "It is all just an estimate," she told Platts. "We know that we are minimizing the flow. There has been no decision to create a new number."

BP and the Coast Guard did not conduct a regular daily press conference May 18 on the crisis, which has shaken the industry since the April 20 blowout of Macondo in 4,993 feet of water about 40 miles from Venice, Louisiana.

BP's estimate of 5,000 b/d has been challenged repeatedly by independent observers in the past two weeks. While conceding the spill could be larger and stressing the 5,000 b/d number was an estimate, however, Suttles and the US Coast Guard have said they will continue to use that number as their official estimate (ON 5/17). But they also have said that regardless of the actual size of the leak, they remain prepared to combat a spill that meets the definition of a worst-case scenario.

Suttles has said that the siphoning procedure is not meant to eliminate the flow of crude leaking from Macondo, where the blowout also destroyed Transocean's Deepwater Horizon drilling rig and created the spill now threatening the Gulf Coast from Florida to Louisiana.

By the end of this week, BP hopes to try clogging the well's malfunctioning blowout preventer with heavy drilling fluids or other items it describes as "junk" of different sizes and shapes.

Suttles also has said the ultimate solution will be completion of a relief well drilling near the original Macondo wellbore for interception of the original well. BP has warned it might need another two or three months to reach the original Macondo wellbore, which was drilled to a total depth of 18,000 feet including the 4,993 feet of water.

The National Oceanic and Atmospheric Administration May 18 warned that a "tendril" of light oil from Macondo is "increasingly likely" to enter the Gulf's loop current and threaten the Florida Straits within eight to 10 days.

Satellite images indicate the main bulk of oil from the well is "dozens of miles away" from the loop current, NOAA Administrator Jane Lubchenco said in a conference call with reporters. But one tendril of light oil is near the current, she said.

The tendril "could reach the Florida Straits in eight to 10 days," Lubchenco said.

Steven Murawski, NOAA's director of scientific programs, said it is "very unlikely" the oil will wash up on the western Florida coast. "If we do get southern produced oil or tarballs, it would go directly due south and through the Florida Straits," Murawski said.

Asked how far up the US Atlantic Coast the oil could meander from the spill, Lubchenco said she doubted it would wander very far. "The models we have show if the oil is entrained in the loop current and is transported up the East Coast, it's not likely to wash ashore very far up the coast, and will be transported farther away from the coast," she said.

There have been no product delivery delays to Florida terminals due to Macondo, said Jim Smith, CEO of the Florida Petroleum Marketers and Convenience Store Association. Florida, with no direct product pipeline access, depends on barges of petroleum products from the Gulf Coast.

While "there's the potential" for disruptions due to any shipping delays arising from Macondo, "it's not there yet," said Smith.

"There hasn't been any delay in any terminal since the spill occurred," he said. "Primarily, it's a wait and see."

Florida terminals currently have "standard inventories" of product on hand, said Smith.

In London, sources confirmed that tanker owners have begun seeking additional clauses to cover Macondo-related pollution costs on boats spot-chartered for voyages to the US Gulf.

"It is not insurance," an owner said. Instead, he said, his company three times had received from charterers an agreement that they would be responsible for any costs incurred for deviating around the pollution area and any decontamination costs.

"It is not a freight premium as such but it is standard practice now to agree to a clause that states any delays and costs are for charterers' account including hull cleaning," added a charterer.

The indemnity clause is significant because it appears to be the first sign in the oil shipping market that any consideration is being given to the spill.

The clause is not needed for those vessels on time charter, sources added, as charterers in this case act as owners and therefore pay for all costs including fuel costs and cleaning, sources said. Within a spot contract, however, both fuel and cleaning costs would normally be met by the owner or the owner's insurance, sources said.