Saturday, June 26, 2010

Will BP's (NYSE:BP) Increased Capture Capacity End Spill?

If BP (NYSE:BP) has some luck on their side, next week when they increase their ability to capture oil from the leaking oil well in the Gulf of Mexico, they'll be able to manage the flow for the first time it started leaking into the Gulf.

A lot has to fall in place, and the most important is whether that increased capacity will be enough to cover the amount of oil continuing to empty into the Gulf.

Estimates will have to be fairly accurate for that to happen, and if they are able to cover those projections, for the first time an estimate as to the liability concerning the spill will probably be able to be made; at least as to how the Clean Water Act goes, which could result in billion of dollars in fines, depending on how BP's role in the accident is defined.

The other problem and potential frustration is if they are able to collect the vast majority of oil spilling, and then storms arrive which undo a lot of that progress for a significant period of time.

If they are able to put the new system in place, at least they'll be able to relatively quickly attach and detach to and from the system, which would allow less oil to continue being released.

At this time meteorologists have said it could be the worst storm season in years, and three major ones could hit the Gulf in a major way.

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