BP: $2.65 billion spent on spill

Oil firm denies Russian reports that CEO is stepping down

Harrison Wallace of Montgomery, Ala., plays his upright bass on the beach just after dawn in Destin, Fla., on Monday.
Harrison Wallace of Montgomery, Ala., plays his upright bass on the beach just after dawn in Destin, Fla., on Monday.

— BP’s mounting costs for capping and cleaning up the Gulf of Mexico spill have reached $2.65 billion, it said Monday, but the oil giant denied reports out of Russia that Chief Executive Officer Tony Hayward is resigning.

The company’s expenses climbed $100 million per day over the weekend, according to an Securities and Exchange Commission filing Monday, as engineers eyed a tropical storm headed for the Texas-Mexico border. It was expected to miss the oil-spill area but could still generate disruptive waves and winds.

It was a rocky start to the week after BP PLC stock fell 6 percent Friday in New York to a 14-year low. BP has lost more than $100 billion in market value since the deep-water drilling platform it was operating blew up April 20, killing 11 workers and starting the leak that has fouled the coastline in four states.

British-based BP rushed to deny the report by Russia’s state RIA Novosti news agency, which said a senior Russian Cabinet official had said Hayward was expected to resign as chief executive.

It quoted Deputy Prime Minister Igor Sechin, before a Moscow meeting with Hayward on Monday, as saying that Hayward would introduce his successor.

BP spokesman Carolyn Copland in London said the report “is definitely not correct.” Sheila Williams, also in London, said, “Tony Hayward remains chief executive.”

After the meeting, a spokesman for Sechin said Hayward’s resignation wasn’t discussed.

In a filing Monday to U.S. securities regulators, BP said the cost of its response to the Gulf of Mexico oil spill had reached about $2.65 billion, up from $2.35 billion as of Friday. The costs include spill response, containment, relief well drilling, grants to Gulf states, claims paid and federal costs but not a $20 billion fund for Gulf damages the company pledged this month to create.

BP said it had received more than 80,000 claims and made almost 41,000 payments, totaling more than $128 million.

The rig drilling the relief well that’s the best hope of stopping the oil spill has made it within about 20 feet horizontally of the blown-out well that’s gushing crude, BP Senior Vice President Kent Wells said Monday.

Wells said the rig is going to drill an additional 900 feet down before crews cut in sideways and start pumping in heavy mud to try to stop the flow from the damaged well. It’s currently about 16,770 feet down.


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The work progressed as Tropical Storm Alex, farther southwest over the Gulf, was forecast to strengthen and become a hurricane today on a course for the coasts of south Texas and northeast Mexico.

The federal government’s point man for the spill, Coast Guard Adm. Thad Allen, said a strong enough storm could shut down drilling operations for up to 14 days.

“As it stands right now, absent the intervention of a hurricane, we’re still looking at mid-August” to have the relief well done, Allen said. Earlier Monday, a BP executive said the well would be done by early August.

The company said it hopes to install a new oil-capturing system by next week that would allow BP to disconnect the equipment faster if a hurricane threatens and hook it back up quickly after the storm passes. Right now, BP would need five days to pull out if there is a hurricane. The new system being developed, which uses a flexible hose, would cut that to two days.

Alex’s track is still far from the oil spill off Louisiana’s coast. But the storm will still generate waves up to 15 feet high and winds of 20 to 30 mph on its outer edges that could pound the oil-spill area, said Stacy Stewart of the National Hurricane Center in Miami.

“That could exacerbate the problem there in terms of pushing oil further inland and also perhaps hindering operations,” Stewart said.

Meanwhile, OPEC called Monday on the United States to reconsider a ban on new deep-water drilling that could hold back oil supplies.

Abdalla Salem El Badri, secretary-general of the 12-member Organization of the Petroleum Exporting Countries, said offshore drilling is an important source of oil and any ban would be too hasty when the cause of the Gulf of Mexico spill is still unclear.

“We should not really ban it and we should not jump to conclusions,” he said after meeting European Union officials in Brussels.

President Barack Obama last month imposed the six month ban on Gulf of Mexico drilling.

Information for this article was contributed by Harry R. Weber, Sofia Mannos, Aoife White, Miguel Angel Hernandez, David Fischer, Nataliya Vasilyeva, Brian Skoloff, Michael Kunzelman and Tom Breen of The Associated Press.

Front Section, Pages 3 on 06/29/2010

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