September Slated for Final Kill of BP Oil SpillAug 19, 2010 | Parker Waichman LLP
Oil Spill In Gulf Of Mexico
It now looks like BP’s blown well in the Gulf of Mexico won’t be completely killed until September. BP engineers are conducting a series of tests in preparation for a procedure called a bottom kill to ensure the well can withstand the pressure from the operation.
No oil has leaked from the well since it was capped with a static kill procedure last month. But the bottom kill is needed to make sure the well stays sealed. Before the well was capped on July 15, 4.9 barrels of oil spilled into the Gulf. The worst oil spill in US history was set off by an explosion aboard the Deepwater Horizon oil rig on April 20.
The bottom kill procedure involves pumping mud and cement into the bottom of the well through a relief well that crews have been drilling since May. According to a Bloomberg report, the relief well still has about 50 feet to go before it is completed. There is concern that 1,000 barrels of oil trapped in the blown well may leak out when the bottom kill is attempted, and BP and the Obama administration haven’t decided yet how to complete the relief well.
Retired Coast Guard Admiral Thad Allen, who is heading up the federal response to the spill, has ordered BP to bring in another blowout preventer to replace existing equipment either before or after the bottom kill, Bloomberg said. The equipment will be mounted to the top of the well near the seafloor to cut off any new surge of oil or natural gas.
Allen would not say when the federal government will direct BP to go ahead with the top kill.
BP Oil Compensation Fund
In other news, the mediator set to take over the BP oil spill compensation fund on Monday is still traveling the Gulf Coast, trying to reassure individuals and businesses impacted economically by the spill that their damage claims will be paid. BP reached an agreement with the Obama administration earlier this summer to fund a $20 billion compensation pool. The fund is to be administered by Ken Feinberg, the Washington, D.C. lawyer who oversaw the 9/11 victims compensation fund.
BP has paid out $376 million to individuals and businesses damaged by the oil spill in the Gulf of Mexico, but its claims process has been criticized for being too slow. At a meeting yesterday in Houma, Louisiana, Feinberg promised better results.
“I will be extremely lenient in documentation,” Feinberg said. “I don’t need reams and reams of stuff. I don’t need a tax return. Do you have something you can show me? Well, the ship captain will vouch for me — fine. Well, my priest will — fine.”
He promised claims from individuals for up to six months of lost income will be paid within 48 hours. Business claims will be addressed within seven days.
As we’ve reported previously, later lump sum settlements for long-term damages will require income statements from the last two or three year. New businesses can be reimbursed for costs associated with opening and for losses in anticipated income, as long as claimants have something to back up their estimates.
Accepting the six-month emergency payment from the compensation fund won’t require claimants to give up any legal rights. However, accepting a settlement for long-term losses will require claimants to waive their right to file a lawsuit, Feinberg said.
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