BP readies killer punch for oil containment

BP tested equipment Tuesday to deliver the first of two planned killer punches to permanently plug its ruptured Gulf of Mexico oil well that caused the world's worst oil spill.

Engineers from the British-based company ironed out last-minute technical hitches before the initial "static kill" operation, which could have taken place later in the day. New revised US government figures show that almost 5 million barrels of oil leaked before the well was provisionally capped in mid-July.

This made the spill, which began in April following a deadly rig explosion and sinking at the BP-owned deepwater Macondo well, the world's largest accidental release of oil, surpassing the 1979 Ixtoc well blowout in Mexico's Bay of Campeche. The Ixtoc well gushed almost 3 million bar-rels.

The new leak estimates spelled further bad news for BP, which also faces an investigation by US securities regulators into whether its employees profited illegally from the spill. The revised numbers suggest the company underestimated costs by at least $1 billion.

US regulators are looking into potential insider trading in shares of BP, two sources familiar with the probe told Reuters.

BP had estimated the well had leaked some 4 million barrels of oil and that it would be fined $1,100 per barrel under the Clean Water Act. The company faces fines of $4,300 per barrel if gross negligence is proven, but said it saw no need to change its provision as a result of the new estimate.

"Given these new figures, BP could be fined $4.5 billion if gross negligence is not proven, or up to $14 billion if it is," one dealer said.

Hopes for definitively plugging the well are focused on the planned "static kill," which will inject drilling mud, and possibly cement later, into the top of the well, the first step of a two-pronged operation to seal off the oil deposit.

A crucial test of the equipment that will deliver the "static kill" was delayed Monday due to a hydraulic leak.

Reuters