BP (NYSE:BP) Relief Well Finally Intersects Macondo

The "bottom kill" is close to being on, as the National Incident Commander Admiral Thad Allen said in a statement that the relief well drilled by BP (NYSE:BP) has finally intersected the Macondo oil well.

Allen said, "The aggregate data available supports the conclusion that the two wells are joined," adding, “We intend to proceed with preparation to cement the annulus and complete the bottom kill of the well.”

Confirmation of reaching the targeted destination came from pressure and sensor tests performed by BP engineers.

The next step in the process will be to pump cement into the well, which starts with the annulus; the space between the walls of the well and the pipe.

After the cement is poured and cured, a series of tests will be performed to confirm the well has been killed.

Estimates are it will take up to four days to complete.

BP (NYSE:BP) Ready to Resume Relief Well Drilling

Drilling on the relief well which will be used to perform the final step to permanently plug the Macondo oil well in the Gulf of Mexico, is ready to be resumed by BP (NYSE:BP).

After the final step of removing the failed blowout preventer and replacing it with a new one, the way is cleared for the drilling to begin to reach the annulus of the well where cement and mud will be injected into the well to perform the "bottom kill," which will be the final step in the overall ordeal, which began April 20 when the Deepwater Horizon oil rig exploded and spewed oil into the Gulf.

Anadarko Petroleum (NYSE:APC) and Mitsui were also partners in the project, with Anadarko owning a 25 percent stake and Mitsui (Nasdaq:MITSY) a 10 percent stake through their majority-owned MOEX company.

Government lead man in the Gulf cleanup, Thad Allen, says the damaged well is now "secured," preparing the way for the resumption of drilling of the relief well, which is a short distance from its destination.

BP (NYSE:BP) Hiding Something with Relief Wells?

In another instance which seems to point to BP (NYSE:BP) always having something else in mind besides using the relief wells for the "bottom kill," which would be a guaranteed permanent sealing of the oil well.

When asked about this by federal investigators looking into the causes of the explosion on the Deepwater Horizon oil rig, BP Senior Vice President Kent Wells skirted around the issue and didn't commit to anything.

Wells said, there are "multiple options" to stop the flow of oil and the relief wells are "the ultimate backup if everything else fails."

Some think this represents a behind the scenes battle between government point man Thad Allen and BP, but if you've followed this story, Allen had been speaking in similar terms not that long ago.

I think all parties involved want to be able to extract the remaining gas and oil in the well to help pay for the liabilities incurred by the spill.

It seems they're hoping as the process advances that people will be more open to having that be the case, as it makes sense to do that and not waste the resource because of the bad circumstances surrounding it.

Government's Thad Allen Screws Up BP (NYSE:BP) Relief Well Efforts

It was puzzling to a number of petroleum engineers when BP (NYSE:BP) was told to attempt a "top kill" on the leaking oil well, while foregoing the "bottom kill," which is the only sure way to permanently plug the well.

This had to be a decision by government officials to attempt to save the approximate 45,000 barrels of oil left in the well, along with the natural gas.

What appears to have been the strategy was to attempt a top kill which may also have also plugged the annulus, a space between the production casing and the outer casing that runs all the way to the top of the well. That is what the purpose of a bottom kill is.

That's why a pressure test was performed, in order to see if in one blow they were able to kill the well, while leaving the option of extracting oil and gas in the future via a relief well already in place.

While it's certain BP wouldn't have had any qualms about this, the decision was National Incident Commander Thad Allen's, and those who gave him the instructions to proceed in that manner.

Because it makes little sense, it is obvious there is something else in play, and that could only be the attempt to salvage the oil and gas in the well for the short term.

Now another unnecessary problem has arisen from attempting the top kill in this way. About 1,000 barrels of oil are trapped below the top, and performing a bottom kill could push it out into the Gulf of Mexico.

But if the bottom seal were to now break, a new avenue for the oil to be released into the Gulf would be created.

Somebody must have wanted this oil and gas awfully bad to take this kind of risk.

Now Allen said today he may order BP to perform the bottom kill like it originally planned to, and accept the fact that more oil will be released into the Gulf.

Has BP (NYSE:BP) Already Plugged Well Permanently?

According to National Incident Commander Thad Allen, BP (NYSE:BP) may have "accidentally" killed the oil well, making the bottom kill from the relief an unnecessary action.

The recent top kill could have resulted in cement moving into the annulus, which is what the "bottom kill" goal would have been to do, and which is the definition of the well permanently and safely being killed.

Allen said in a briefing, "A bottom kill finishes this well. The question is has it already been accomplished?"

He added that BP is now putting into play a pressure test on the well to determine whether or not the annulus has been reached by the cement. If so, the pressure tests will reveal it.

The question does arise as to whether this was really inadvertent or not, or an attempt to have it happen this way in order to allow the oil giant to either resume drilling in the future or sell the assets to another energy company.

We'll probably never know, but it's highly doubtful the government or BP ever had the idea in their mind to just let the oil sit underneath the Gulf floor. This gives them a nice out and reason to use the relief well for 'other purposes.'

BP (NYSE:BP) Stops Drilling Relief Well As Storm Approaches

Just 30 feet away from their destination, BP (NYSE:BP) has been forced to suspend drilling operations in relationship to the relief well, which will permanently plug the well.

The operation could be delayed up to three days while the company waits for the latest Gulf storm to move out of the region.

How it works is a temporary object called a storm packer, which is a type of plug, will be placed in the casing, according to Thad Allen.

Allen added, "They are just going to wait out the storm. We expect the weather to be choppy enough...we are taking these steps as a precaution."

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.

BP (NYSE:BP) Confirms Suspicions They May Drill in Same Oil Well Again

With BP (NYSE:BP) backing off its original strategy of performing a bottom kill on the Macondo oil well, it has raised questions as to whether or not they're thinking of making money off the well again, and that has been confirmed as a very strong likelihood by COO Doug Suttles.

Suttles said at a press briefing, "There's lots of oil and gas here. We're going to have to think about what to do with that at some point."

The recent success of the "top kill" offered the option to BP, and it looks like it is definitely part of their goals going forward.

There is approximately 45,000 barrels of oil still in the well, estimated to be valued at just under $4 billion, depending on the price of oil per barrel at the time it's being calculated.

Government point man Thad Allen said this about it, "I would assume that's a policy issue related to the management of the lease. Frankly, it hasn't been raised to my level at this point. I'm not sure I can comment on it."

While it may be true of Allen, it can almost be counted on that the U.S. government isn't surprised at the comments of Suttles, and have more than likely been talking privately with the company about it.

The Interior Department does refute that idea, with spokeswoman Kendra Barkoff saying, "The well is almost dead. Under no circumstances are we going to allow them to reopen the well to extract oil and gas."

That remains to be seen. But the operative word here is "them," as far as Barkoff's comments. It could easily be interpreted that another company besides BP could come in and extract the oil, if BP sold the asset to them.

Either way, this part of the story isn't over, and the relief wells could be used to plug the well, but also could be used to access the oil as well.

It does confirm what we've been talking about the last couple of days at Commodity Surge that it looks like this is what BP has been planning, and now we know it is.

Why is BP (NYSE:BP) Not Committing to Cementing Relief Well?

The apparent turnaround by BP (NYSE:BP) in regard to pumping the relief well full of mud and cement to permanently plug the oil well, speaks to something happening behind the scenes which isn't being communicated to the public.

Lately when asked about injecting the oil well for the bottom kill, BP hasn't said they're going to plug the well permanently, seeming to say they're considering doing something with the oil rather than trapping below the Gulf floor with no profitable way to extract it again.

That speaks to coming back some day and resuming operations, which after things calm down, they could attempt, or more likely, it speaks to them thinking in terms of selling the asset to another oil company.

The estimated amount of oil left in the well is a little over 45,000 barrels, which would fetch well over $3 billion. BP is probably thinking why waste the oil when they could sell the asset as part of the process of raising capital.

But the sensitive nature of coming out with that at this time would cause a new round of criticism from some quarters, and would detract from the success in finally getting a handle on the leaking oil.

There can be no doubt the government is talking with BP behind the scenes about this, although they are sure not to admit to this, at least no anytime soon.

It makes sense to not waste the oil, which American consumers so desperately need, and to not to waste the capital BP could raise help them over the next several years.

BP (NYSE:BP) Completes Pumping Cement Into Oil Well

BP (NYSE:BP) has completed the final step in the "static kill" at the top of the oil well, finishing pumping cement into the top of the well, according to Thad Allen, who is overseeing the operations for the government.

Allen said, "I think we can all breathe a little easier regarding the potential that we'll have oil in the Gulf ever again. But we need to assure the people of the Gulf and the people of the United States that this thing is properly finished."

The cement should take about 24 hours to dry, added Allen.

Next comes the long-awaited bottom kill from the relief well, which will pour into cement at the bottom to completely and permanently seal the well.

Final drilling will take about a week to reach its destination, which is just above the large reservoir of oil. Once it reaches there, it could take weeks before the well is totally sealed with more cement.

A second relief well is being drilled in case the first one fails.

BP (NYSE:BP) To Make Billions Off Remaining Oil?

Now that the end is coming as far as permanently plugging the oil well, the question needs to be asked as to what to do with the remaining oil, which estimated at about 45,000 barrels. That would generate close to $3.7 billion at current market prices, and more if oil prices continue to rise.

The attempt is already being made to make it sound controversial if BP somehow taps into the oil or sells the oil well to another company in order to generate revenue.

But the issue is simpler than that: do we waste that many barrels of oil for no reason? Now that the well is safely plugged, why waste that much oil?

Some ridiculous comments are already being made that oil from the site shouldn't be used commercially, as if it's some type of holy site or shrine. It's a place to access oil for millions of people to use for their needs. To let it sit and waste underneath the Gulf of Mexico would be a crime, and poor management of our resources.

There is the possibility BP may want to leave the well as it is with the top kill, as it will hold the oil in and leave it available for access in the future.

You can be sure there are conversations with government officials about this, as the waste of 45,000 barrels and the use it could get, jobs it would create, and money it would make, all make it in the best interest of Americans to have the oil be extracted from the well and used.

To think differently would be naive. What's being weighed is how deep the political fallout would be if it was to go forward.

This is why second thoughts have been thrown out be BP about the pumping of cement and mud into the well using the relief well. As once it's completed, there is no way to be able to access the oil.

At minimum, I would think they're at least considering selling the existing well to another company in order to have the oil not go to waste, and to make it more palatable to those who would strongly oppose BP retaining possession and resuming drilling.

How government officials, especially, respond to these questions will determine whether or not it's something that's in the works or not.

BP's (NYSE:BP) Static Kill Successful, Final Kill Coming Soon

The first step to permanently plug the Macondo well in the Gulf of Mexico has been achieved by BP (NYSE:BP), as they said the well has reached "static condition," meaning "The well pressure is now being controlled by the hydrostatic pressure of the drilling mud, the desired outcome of the static kill procedure," according to the oil company.

BP began the process at about 4:00 PM EDT Tuesday, and pumped mud in the top of the well for close to eight hours.

The next step in the process will be to perform a "bottom kill," where mud and cement will be injected into the well almost 2 1/2 miles underneath the bottom of the Gulf. That will ensure a complete and permanent solution to the problem.

Sometime in the next 10 to 14 days the final procedure will begin. That period of time could be extended if any bad weather arises. The time frame is a best-case scenario.

BP (NYSE:BP) Static Kill Begins, Fixes Hydraulic Leak

With the official beginning of the static kill by BP (NYSE:BP), whereby they're attempting to permanently plug the oil from the Macondo well from leaking into the Gulf of Mexico, BP had to put things temporarily on hold until they fixed a leak in their hydraulic system.

That has been completed, and at about 4:00 PM EDT Tuesday, BP began the operations of pumping heavy drilling mud into the top of the well to see if that will do the job.

They of course still have the other means of plugging the well through the relief well far below the surface and far below the top of the well, where they're beginning to pump mud.

That bottom kill should start in about two weeks or so, assuming the weather conditions cooperate.

Expectations for the "static kill" have been being managed from the beginning, as it's not nearly as guaranteed as the bottom kill will be, as there are possibilities oil will escape from parts of the casing of the well or the annulus, which would increase the difficulty and chances of complete success.

BP (NYSE:BP) Change of Leadership Won't Dampen Cleanup Efforts says Thad Allen

Government point man in the Gulf of Mexico oil spill, former Coast Guard Admiral Thad Allen, said the change of CEOs by BP (NYSE:BP) won't change the commitment to cleanup efforts in the region.

Commenting on the decision to remove Tony Hayward on October 1, Allen said, "I don't see any diminishing of performance or priorities," from the transition.

Effectively Bob Dudley will be CEO, as Hayward will obviously be a lame duck and non-entity; at least in the United States, where he has numerous PR disasters which made the situation worse than it had been from that perspective.

The schedule to being the "static kill' on Monday remains on target as well, which at the end of the week should finish off with the relief well ready to plug the well permanently on the bottom.

The static kill will focus on the top of the well, where cement and mud is injected into the well. The relief well does a similar thing from the bottom of the well.

Allen added the containment cap which has stopped the oil from flowing into the Gulf remains stable and continues to do the job it was intended to do.

BP's (NYSE:BP) Time to Kill Oil Well Approaching

Former Coast Guard Adm. Thad Allen, who retired the the middle of the
BP (NYSE:BP) Gulf oil crisis, but still represents the U.S. government in managing the cleanup process, said the process to begin killing the Macondo oil well should begin on August 2.

The well kill will be performed in two stages, with the first being called a "static kill," referring to cement and mud being shot into the well via the top. That will be the procedure on the second of August.

Assuming that is successful, the second stage, which is tentatively scheduled for August 7, would be to shoot mud and cement in from the relief well, which has reached its desired position and is ready to take the next step. The relief well is far below the top of the oil well and deep underground. That is called a bottom kill, and depending on the outcome of the static kill, could take several days or several weeks to complete.

The time frames could easily change if tropical storms enter the region and operations have to be shut down.

BP (NYSE:BP) Relief Well Drilling Stopped on Approaching Storm

With the potential for a tropical cyclone to hit the Gulf of Mexico, BP (NYSE:BP) workers have stopped drilling the relief well, which has the best potential to permanently stop the oil leak.

According to the National Hurricane Center, there is a 20-30 percent possibility of tropical storm winds of 39 mph or more to hit the area of the spill site.

A device called a packer has already been put in place in the relief well, which is used to stabilize it during storms.

Ships involved at the spill site don't move quickly, and so plans to evacuate are already being put into motion.

Although only four feet from the oil well, the relief well drilling could be stopped for up to two weeks.

The lead in the situation for the government, Thad Allen, has it on him to decide whether or not to open the well and allow oil to pour into the ocean or leave it shut.

BP (NYSE:BP) Stops Oil Leak - Share Price Explodes!

BP (NYSE:BP) shares exploded upward after the announcement they had stopped oil from leaking into the Gulf of Mexico.

Shares closed at $38.92, rising $2.74, or 7.57 percent. Share price also continued to move up in trading after close.

In a press conference, BP's Kent Wells was chosen to deliver the news most have been waiting to hear since the the explosion on the Deepwater Horizon oil rig in April started the oil leaking.

BP wasn't sure how long it would take because it wasn't known if the initial closing of the valves would stop the leak, or they've have to continue on with other steps.

Calling it a "critical milestone," Wells did stress that it is not an guaranteed success. Oil could begin flowing again, depending on the results of well-integrity tests, which will search for leaks. That could last up to 48 hours.

Now they also await the first relief well to be completed which will permanently seal the oil well.

BP has said when they stop the oil they wouldn't be producing any more from the well.

The rise in share price brought the market cap of the company up to $121.85 billion.

Why New BP (NYSE:BP) Containment Cap Takes Time to Test

The first thing to understand about the new containment cap being tested on the leaking oil well in the Gulf of Mexico, is it's a temporary measure, and is being put in place until the more permanent relief well is put in place, which will plug the oil leak.

Now that the cap is in place, it could take up to two days or longer to do what is needed to be done to successfully implement the system.

The first step, which has already been completed, is doing a seismic survey, which created a map of the rock underneath the floor of the sea in order to compare it with future surveys, so that they are sure pressure on the well isn't causing problems which can't be seen. That took at least several hours to complete.

Next, engineers from BP will shut off the pipes transferring oil to vessels on the surface of the Gulf, to see ow the cap takes the pressure of the oil pushing against it.

After that three valves which allow oil to pass through the cap will be closed one at a time.

If the oil is stopped too quickly, it could end up damaging the oil well even more, or blow the cap off the well.

What scientists want to see is the pressure readings to come in at around 8,000 to 9,000 pounds per square inch. That would indicate there are no other leaks coming from the oil well. If it's under about 6,000, they say it would mean there are leaks that hadn't been identified yet.

The purpose of the test is to see what the condition of the "wellbore below the seafloor," according to point man Thad Allen.

Each step will determine if another step will need to be taken. If nothing else is discovered, the test could be completed, and the test would be over, and the leak stopped.

That's why the range of 6 hours to up to several days has been thrown out, as each step and its success or lack of success, will change the timeframe.

Success of New BP (NYSE:BP) Containment Cap

Even though there are high expectations about the new BP (NYSE:BP) containment cap put in place, it's going to take up to several days before it is known if it is successful or not.

After being placed, tests will now begin to ascertain whether or not the new cap can survive the immense pressure from the oil escaping and then be able to distribute it to the surface vessels via the pipes.

Assuming it does work, it should effectively stop all oil from escaping into the Gulf, and give some breathing room before the permanent relief well is put in place.

And if the first relief well fails, a properly working containment cap would keep the oil from flowing into the ocean until they make a second attempt with a backup relief well.

The key to identifying if it is working properly or not is the pressure within the cap. If it is rising, it would confirm there are no other well leaks, if pressure is lower, it means there is probably another leak somewhere else in the well, whereby a second cap would be placed over the first.

The new containment cap weighs in at 150,000 lbs.

BP (NYSE:BP) Oil Leak Contained by Monday?

It's possible with the combination of a new containment cap and connecting another ship to a part of the leaking oil well in the Gulf, that BP (NYSE:BP) effectively contain almost all the oil leaking from the well by Monday.

Estimates from National Incident Commander Thad Allen have been the new system and cap could capture up to 80,000 barrels of oil a day, which would exceed government estimates of up to 60,000 barrels a day leaking into the Gulf.

The major challenge for BP will be successfully placing the new containment cap on the oil well, which isn't guaranteed.

If it does work, it would be a major turning point in the oil disaster, and would give some breathing room to complete the first relief well, which is considered the best chance at completely stopping the oil spill.

It hasn't been made totally clear if the new containment cap would completely stop the oil from flowing, or if it is simply an improvement over the last cap, and would greatly enhance the capture rate, but would still allow oil to flow into the Gulf.