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Friday, July 16, 2010

BP Crisis: End in Sight?

Undoubtedly the biggest international story of yesterday was that the oil leak had finally stopped for the first time since the 20th of April, almost 3 months ago. While they have plugged the leak celebrations are muted as the relief effort is still in its early stages and a permanent solution is still a long ways off.

The team first needs to measure the pressure in side the well of oil on which their cap was placed. If the inside pressure is high that is a good sign. However, low pressure means that there is a leak somewhere else on the ocean floor releasing oil and therefore lowering the pressure in the well. This operation will be completed, it is expected in the next 48 hours.If this is successful the team will then turn its attentions to the construction of two relief wells, the first of which will not be completed until mid-August.

However, the capping of the oil well is clearly not the entirety of BP's problems. It is expected to have cost the company already 3.5 billion US dollars and compensation claims could be up to ten times that figure. Indeed the suffering of the people in the Gulf will long outlive the capping of the leak. Tourists have been put off by the leak and the fishing industry devastated. All of this burdening an area still heavily burdened by Hurricane Katrina five years ago.

BP has attempted to speed up the sail of 20 billion dollars worth of assets to help to deal with the costs of cleaning up the Gulf. President Obama has called the news a positive sign but said that it was still early stages. Further comment is expected today.


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