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BP successfully plugs and cements Macondo well, costs reach $6.1bn

Oil and gas supermajor BP (LON:BP) said today that its static kill operation aimed at plugging the Macondo well (MC252) and its cementing have been successful with pressure testing indicating an effective cement plug in the casing.

BP is currently drilling its relief wells with the first well having reached a measured depth of 17,909 ft (feet), while the drilling of the second one has been suspended not to interfere with the completion of the first well. MCM252 is expected to be intercepted by the first well on 15 August, subject to weather conditions.

The company confirmed that no new oil had flown into the Gulf of Mexico since 15 July. BP has conducted overflights and other reconnaissance and has found less skimmable quantities of oil over the last several days. To date, skimming operations have recovered a total of over 826,000 barrels of oily liquid and a total of 411 controlled burns have been carried out.

To date, BP has made 103,900 payments to individuals and businesses impacted by the oil spill totaling US$319 million. As of 7 August, 145,000 claims have been filed.

The total cost of the response amounts to US$6.1 billion, including the cost of the spill response, containment, relief well drilling, static kill and cementing, grants to Gulf states, claims paid and federal costs.

On June 16, BP announced an agreed package of measures, including the creation of a $20 billion escrow account to satisfy certain obligations arising from the oil and gas spill.

The disastrous oil spill, which has been labeled as the worst environmental disaster in US history has wiped out more than a third of BP’s market value since the explosion of the Deepwater Horizon rig on 20 April. Current chief executive of BP Tony Hayward, who has been widely criticized for his handling of the crisis, will be relieved by managing director and Robert Dudley on 1 October this year.

Disclosure: The author holds no positions in the company