Friday, July 9, 2010

Thad Allen and BP (NYSE:BP) Relief Well Expectations

Even though it has been repeated over and over again that the first relief well being drilled in an attempt to plug the oil well is unlikely to be finished in July, media outlets continue to hammer on the possibility as if it's highly likely it will happen.

The problem is if everything goes exactly right, first starting with the weather, it is possible for the job to be completed, which again, is a reference to a best-case scenario.

What is less known, and could still have a significant impact on the day the well could be plugged - even if the weather conditions are optimal - is whether or not oil is leaking through more than one of several concentric rings.

If it is flowing through what is called the center ring only, then the best-case scenario could in fact have a chance to be accomplished, assuming the best weather conditions.

But if it's flowing through the outer ring, that would have to be plugged first before they concentrate on the other ring, which would take time.

That means every ring would have to be drilled through and plugged until they reach the final center ring to plug it. If that's the case, even if everything else goes right it will push conclusion of the plugging of the well back to its mid-August estimate.

The bottom line is if the weather is perfect and the oil is flowing only through the center ring, it's possible the well could be plugged much earlier. If not, the original August projections will remain in effect.

That is according to Thad Allen, now retired Coast Guard Admiral who remains as the point man for the government in the BP oil spill containment effort.

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