The result was paralysis, The Times said.  For nine long minutes, as the drilling crew battled the blowout, no warning was given to the rest of the crew, the paper noted.

For many, the first hint of crisis came in the form of a blast wave, according to the report.
The paralysis had two main sources, The Times said. The first was a failure to train for the worst.

The crew members, though expert in responding to the usual range of well problems, were unprepared for a major blowout followed by explosions, fires and a total loss of power, the report said.

They were also frozen by the sheer complexity of the Horizon’s defenses, and by the policies that explained when they were to be deployed, the paper said. One emergency system alone was controlled by 30 buttons.

The Horizon’s owner, Transocean, the world’s largest operator of offshore oil rigs, had provided the crew with a detailed handbook on how to respond to signs of a blowout, the report noted.

Yet its emergency protocols often urged rapid action while also warning against overreaction.

The fiery April 20 explosion toppled the giant rig into Gulf of Mexico. The rig’s collapse ruptured underwater risers, opening a torrent of oil that fouled environmentally fragile Gulf coasts for three months before it was finally capped.
PTI

They are expected to discuss BP’s role in the Gulf of Mexico oil spill and whether the British energy giant had influence in the release of the Lockerbie bomber from a Scottish prison last year — issues that have complicated transatlantic ties.

Cameron’s first visit to Washington as British prime minister comes amid a US backlash against BP. With an eye to British pensioners and other investors at home, he has pledged to stand up for the embattled company.

Aides to both leaders insist the talks aim to build on a personal rapport they struck up at last month’s Group of 20 summit in Canada and that the agenda will focus more on the war in Afghanistan, the global economy and the Middle East.

But BP and its role in the worst oil spill in US history loom large. Differences over BP’s treatment and over approaches to economic recovery raise fresh questions about a historic Anglo-American alliance already past its heyday.

Under heavy criticism over the Gulf disaster, BP faces demands from US lawmakers for an official inquiry into whether it had a hand in the release of the Libyan convicted in the 1988 bombing of a Pan Am flight over Lockerbie, Scotland. BP has confirmed it lobbied the British government in 2007 over a prisoner transfer deal because it was concerned a slow resolution would hurt an offshore drilling deal with Libya. But the company said it was not involved in talks on the release of Abdel Basset al-Megrahi, sentenced to life for the deaths of 270 people, including 189 Americans.

Cameron has made clear he will defend BP, saying it must remain “strong and stable” to make good on its promise to compensate oil spill victims and for the sake of employees and people with pension funds invested in the company in both countries.
Obama, whose approval ratings have been undercut by public anger over the disaster, has taken a hard line with BP, although his rhetoric has softened recently amid criticism his administration had gone too in bashing the company. Obama and Cameron will meet amid hopes a capping test on the blown-out well, which has largely choked off the undersea flow of oil, will pave the way for a permanent fix.

And  BP said it had spent US $3.95 billion so far on efforts to tackle its leaking oil well in the Gulf of Mexico and that it aims to permanently kill the well in the first half of August.
Agencies

BP has suffered numerous setbacks in its struggle to control the 86 day old gusher that stands as the worst offshore oil spill in US history. And BP cautioned that tests of its latest containment system were not sure to succeed.

But BP shares, battered for weeks as damage to the US Gulf Coast economy and cleanup costs mounted, surged nearly 8 per cent in New York on Monday by promising developments at sea and by news that US energy company Apache Corp and other bidders were in talks to buy up to US $10 billion worth of BP assets.

The potential breakthrough in efforts to fully contain BP’s ruptured wellhead also came as the Obama administration issued a revised moratorium on deep-water oil drilling that critics called a mere repackaging of an earlier ban struck down by the courts. The prospect of legal battles over the administration’s bid to suspend deep-sea energy exploration in the Gulf already has had a chilling effect on drilling, putting tens of thousands of jobs at risk, industry officials and analysts said.

Even as the seven-member panel began its investigation into the cause and effects of the spill, BP reported a potential turning point in the crisis. Hours after starting up a new oil-siphoning system, BP said Monday night it had installed a 40-ton containment cap atop its leaking wellhead a mile underwater — a device larger and tighter-fitting than the one it removed on Friday. Crude oil continued to pour into the sea for the time being, but BP said it planned to begin testing the new cap, and the internal pressure of the well, on Tuesday by closing off valves on the device to constrict the flow of oil.

US Interior Secretary Ken Salazar told a Senate hearing he would ask BP to repay salaries of any workers laid off because of the six-month moratorium on deepwater exploratory drilling imposed by the US government after the spill.

Turning up the heat on the British oil major, a senior US Justice Department official said after the markets closed that the department was “planning to take action” to ensure BP had enough money on hand to cover spill damages.

BP’s total bill so far, including cleanup costs, has reached $1.25 billion and the US government has already said it will have to pay billions more in penalties.The White House echoed Salazar’s comments.

“The moratorium is as a result of the accident that BP caused. It is an economic loss for those workers, and … those are claims that BP should pay,” White House spokesman Robert Gibbs told a briefing.

BP believes it may be heading for a showdown with the White House over widening liability demands, a BP source said. While the company has said it will pay for the clean-up and direct damages to those affected by the spill, the moratorium was a government decision and costs related to it were a different matter, the source said.

Earlier, the company’s stock closed down 4 percent in London on concerns the company might have to suspend its dividend payment. US politicians have been calling for this, saying the company should put its cash into paying for legal claims and environmental damage in the Gulf.

After contaminating wetland wildlife refuges in Louisiana and barrier islands in Mississippi and Alabama, the black tide of crude oil has taken aim at some of the famous white beaches of Florida, whose economy is heavily dependent on tourism.

One-third of the Gulf’s federal waters are closed to fishing and the toll of dead and injured birds and animals is climbing.

Frustration with BP and the US government’s response to the leak is growing in southeastern Louisiana, where fishing bans are taking a heavy toll on the local economy.

Joan Strohmeyer, who owns the Lighthouse Lodge in Venice, Louisiana, said her hotel is fully booked with BP workers and others responding to the spill, but that may not last.

“Is there going to come a time where I have nobody in my hotel?” she asked. “I don’t know whether we’re going to end up being ahead or behind.”

The Obama administration, facing growing voter discontent over its own handling of the crisis, has sought to distance itself from the company. Obama has also toughened his rhetoric in recent days and said in an interview this week he would fire BP CEO Tony Hayward if he worked for him.

Agencies

ONGC had brought down the insurance premium for its offshore assets by around 20 per cent this fiscal in spite of an 8 per cent increase in their valuation, said Sharma while speaking with media persons on the sidelines of conference organised by CII.

The company paid US $27.05 million premium for 2010-11, down over US $7 million from US $34.19 million paid in 2009-10. The value of these assets was pegged at US $26.50 billion, up from about US $25 billion in 2009-10. “I have been saying that this spill is going to be a game changer,” Sharma said.

ONGC insured the offshore assets prior to the spill in the Gulf of Mexico, he said, adding post spill the premium would have gone up by  three times. The US ordered halt in deep-water drilling and extended a ban on new permits after the oil spill caused by  20 April fire aboard the BP Plc-leased Deepwater Horizon rig in the Gulf.  The spill has polluted at least 140 miles of shoreline.

Due to Eurozone crisis we expect prices of crude to remain weak but in long run I expect prices to rise, Sharma said while replying to question.

State owned oil and gas behemoth ONGC’s CMD R.S. Sharma said,  oil spill in gulf of Mexico from BP owned field is going to prove a game changer event for entire exploration and production industry and it will leave long term impact on the industry.

Addressing a press conference here on Wednesday Sharma said,  there is already moratorium imposed by US government on further deep water and ultra deep water drilling activities and this moratorium might get extended to other parts of North America and North Sea as clamour for such moratorium increases in European countries too.

He further said,  from now on it will be tough to get approval from regulators for deep water and ultra deep water E&P and they will demand higher safety standards, which will  result in cost escalation for both operators as well as service providers. 

After the incident we reviewed our safety practises almost five times and we fill,  we are prepared to handle such accident takes place in the Indian offshore sector,  he assured.

The company said that the operation, which will pump heavy mud down the wellbore in an attempt to gain control of the oil flow and ultimately kill the well has already begun. Earlier, BP chief Tony Hayward gave the top kill procedure a 60 per cent to 70 per cnet chance of success.

The fundamental error the BP official referred to concerned the results of a negative pressure test.  According to the investigators,  two hours before the explosion, as preparations were made on the Transocean semi-submersible deepwater horizon to start negative pressure testing of the wellbore, the system gained 15 barrels of liquid rather than the five that were expected, indicating there may have been influx from the well. A cementer witness was quoted as saying. “The well continued to flow and spurted.”

The investigator said the pressure test was then moved to the kill line, where a volume of fluid came out when the line was opened. It was then closed. At this time, pressure began to build in the system to 1400 pounds per square inch. The line was opened and pressure on the kill line was bled to 0 psi, while pressure on the drill pipe remained at 1400 psi.

The BP investigator said this indicated a “fundamental mistake” may have been made here as this was an “indicator of a very large abnormality.”  However, once the pressure was bled off, work continued as normal – the line was monitored and by 7.55pm the rig team were apparently satisfied the test had been successful and started displacing the remaining downhole fluids with seawater.
It is not made clear yet as who made decisions after the problem was found. BP and rig owner Transocean both had supervisors on the rig when it exploded.

Details of events leading up to the blowout come as new information from the leaking well seems to confirm widely held suspicions within industry that problems with cementing played a key role in the 20 April explosion.

BP performed diagnostic testing of the BOP – a move which will determine how the UK supermajor will design the top kill of the Macondo well or whether the procedure will work at all. Company official Kent Wells said that BP staff will begin testing to see if they can actually inject mud at each of the five entry points that could be used in the top kill. The tests are expected to take 12 to 24 hours and the results will determine how BP ultimately designs the top kill operation and any future well interventions.                                                                                            News Agencies

BP has accused by the US government of failing to share information in a timely fashion about the Gulf of Mexico oil spill, was forging ahead with efforts to contain the gushing crude. The pressure to act is huge. TV images of oil sloshing into Louisiana’s marshes has underscored the gravity of the situation and raised public concern about the catastrophe, keeping it high up on the political agenda in Washington.

“It’s depressing for sure. This is what we were hoping wouldn’t happen,” said Randy Lanctot, executive director of the Louisiana Wildlife Federation. Deep red oil coated miles of coastline along the southern tip of the Mississippi River delta, the harbinger of what many in Louisiana fear will be a much more devastating inundation. In places, a thick oily sludge had washed up into coastal inlets where it nestled amid the marsh grass while elsewhere a rainbow sheen of oil floated off the coast suggesting more oil would soon wash onto the low-lying islands.

In a clear sign of Washington’s growing frustration with BP’s handling of the spiraling environmental disaster, the U.S. government accused BP of being less than transparent about the unfolding situation, while a senior lawmaker said its actions amounted to a ‘cover-up’. “In responding to this oil spill, it is critical that all actions be conducted in a transparent manner, with all data and information related to the spill readily available to the US government and the American people,” Homeland security secretary Janet Napolitano and environmental protection agency administrator Lisa Jackson said.

They said in a letter to BP CEO Tony Hayward that despite claims by BP that it was striving to keep the public and the government informed, “those efforts, to date, have fallen short in both their scope and effectiveness.” The statement followed allegations that BP had failed to share everything it knew about the extent of the damage and the amount of crude flowing unchecked from the ruptured well.

The company has lost around US $30 billion in value in the month since the rig explosion, which killed 11 workers, sparked the disaster. BP said on Thursday it was siphoning 5,000 barrels (210,000 gallons/795,000 litres) per day of oil from the gusher, from 3,000 barrels a day previously. “The oil plume escaping from the riser pipe has visibly declined today,” BP spokesman Mark Proegler said after the company announced that a mile-long (1.6 km) tube was tapping into the larger of two leaks from the well.

However, a live video feed of the leak, provided by BP showed a black plume of crude oil still billowing out into the deep waters. BP has been estimating the leak was flowing at a rate of 5,000 barrels per day, but scientists and the government have questioned that figure. Scientists analyzing video of the oil gushing from the seabed have pegged the spill’s volume at about 70,000 barrels per day.                                                                                                                                News Agencies

Bullish Factors
Climate change concerns will lend further support to gas demand. As carbon emissions start coming with a price attached, cleaner-burning gas will be increasingly favored over coal for fueling power plants. Many newer plants use dual-fuel designs, enabling them to switch readily to whichever fuel is cheapest. As the hidden subsidy of externalized emissions costs is taken away from coal, gas will be cheaper, and it will stay cheaper. The vehicle angle is another hugely bullish factor for gas, but so far the markets don’t seem to have discounted it at all. The longer prices remain too low to sustain increased drilling, the more tension there will be in the price slingshot.
A year from now, we will be looking back on those analysts who predicted US $2 natural gas by the end of this year with the same sad regard that we now have for the ones who saw oil trading in the US $40s in December and thought it was going to US $25.
You may recall that’s when market got bullish. I feel exactly the same way about gas now.
Another reason to start getting bullish is the extremely bearish gas sentiment itself. We haven’t seen gas prices stay this low in years, and gas continues to trade at a historically low price relative to oil on an energy basis. As Warren Buffett likes to say, “Be fearful when others are greedy, and be greedy when others are fearful.”