Tuesday, August 10, 2010

BP's (NYSE:BP) Permanent/Temporary Plugging of Gulf Oil Well

It can no longer be taken seriously that BP (NYSE:BP) is permanently plugging the Macondo oil well in the Gulf of Mexico, in the sense that it will never be accessed again.

That doesn't mean the leak won't be permanently sealed, just that the ability to extract oil and gas from it again surely has been taken into consideration during the entire process.

Even the second relief well, always from the beginning touted as a backup if the first relief well didn't work, had to be considered another way to tap into the oil and gas once the cleanup is well under way and media coverage and public anger had subsided.

It's impossible to know when BP may end up tapping into the well again, or if they decide to sell it off to a competitor who could do the work without the type of reaction BP would have to endure.

Whatever the eventual outcome of the oil well, one thing is sure, that much oil can't be allowed to go to waste, and it isn't just business interests that are at stake, but consumer and political as well, even though there will be a very low key approach and a significant length of time which goes by before we hear talk and trial balloons thrown out to see the reaction and test the waters.

We'll probably be through a lot of the claims process at that time and the cleanup, which will help defuse the emotion related to the Gulf spill and its effects.

In the end, BP will stop the leak permanently, but the Macondo well will live on, and the stoppage there will only be temporary.

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