BP: Gulf relief well on target for mid-August

June 26, 2010 at 12:00a.m.

Associated Press

NEW ORLEANS

BP’s effort to drill a relief well through 21/2 miles of rock to stop the Gulf spill is on target for completion by mid-August, the oil giant said Friday. But BP’s stock tumbled anyway over the mounting costs of the disaster and the company’s inability to plug the leak sooner.

The relief well is considered the best hope of halting the crude that has been gushing since April 20 in the biggest offshore oil spill in U.S. history.

The crew that has been drilling the relief well since early May ran a test to confirm it is on the right path, using a tool that detects the magnetic field around the casing of the original, blown-out well.

Once the new well intersects the ruptured one, BP plans to pump heavy drilling mud in to stop the oil flow and plug it with cement.

BP stock tumbled 6 percent in New York on Friday to a 14-year low on news that BP has now spent $2.35 billion dealing with the disaster.

BP has lost more than $100 billion in market value since its deep-water drilling platform blew up, and its stock is worth less than half the $60 or so it was selling for on the day of the explosion.

Meanwhile, the forecasters and the oil company kept an eye on an area of low-pressure in the Caribbean that threatened to turn into the first tropical depression of the Atlantic season.

The effort to capture the oil gushing from the sea bottom could be interrupted for up to two weeks if a storm forces BP to move its equipment out of harm’s way, said Coast Guard Adm. Thad Allen, the government’s point man on the crisis.

BP would need about five days to move all of its equipment out of harm’s way.

Vice President Joe Biden will head to the Gulf on Tuesday to visit a command center in New Orleans and the oil-fouled Florida Panhandle.