AT A GLANCE: Cautious BP Makes Slow Progress In Oil Leak Cap

15th Jul 2010 12:21

THE LATEST: BP PLC's (BP) progress toward fully capping the leaking Gulf of Mexico oil well continued to be frustratingly slow Thursday. After finally getting the green light to begin crucial pressure tests that will determine whether the cap can work, BP said it would have to postpone the procedure for a second time to repair a leak in a choke line, which leads off from a system of blowout preventers being used in the operation. It was not clear how long repairs to the leak will delay the test. WHAT NEXT: The pressure test will be crucial in determining whether BP can shut down the leak within the next few days, or if oil will continue to spew from the well head until relief wells can be completed within the next few weeks. BP will perform the test by gradually closing valves attached to the cap on the well. If pressure in the well remains high throughout the test, BP believes it will be able to fully shut down the leak. If pressure is too low, it most likely indicates that the well bore is damaged and oil is leaking from another location. In this case BP will be able to continue to siphon most of the leaking oil from the well head to ships on the surface, although this operation will be vulnerable to bad weather disruption. COUNTING THE COST: As BP gets closer to stopping the leak, analysts have been estimating just how much the Gulf disaster will cost the company. Citigroup estimates the gross cost of the spill at $50 billion. After adjustments for tax deductions and the share of the costs borne by BP's partners in the well, Citigroup said BP will have to pay around $39 billion spread over the next 3 years. BP's FINANCIAL POSITION: BP's is financially strong enough to cover all these costs and may even be able to resume paying a dividend of up to 46 pence a share next year, if the political climate allows, Citigroup said. -By James Herron, Dow Jones Newswires; +44 207-842-9317, [email protected] (END) Dow Jones Newswires July 15, 2010 07:21 ET (11:21 GMT)