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BP's Estimate of Cost of Spill Cleanup Soars to $6.1 Billion

Source: Marketwatch

Posted on 09 Aug 2010

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With the cement plug holding on its troubled well in the Gulf of Mexico, BP said that the cost of the spill response has soared to a staggering $6.1 billion, approximately.

BP has also said it plans to dispose of up to $30 billion of assets in order to ensure it has enough cash on hand to cover the spill costs. In the middle of June, the firm announced the creation of a $20 billion escrow account to meet its obligations arising from the spill.

Last week, it agreed to sell its oil and gas exploration business in Colombia to a consortium of Ecopetrol, Colombia's national oil company, and Talisman of Canada, for $1.9 billion in cash.

BP is also mulling disposing of assets in Venezuela, and it has already signed a deal to sell oil and natural-gas fields across North America and Egypt to Apache Corp.

A relief well, however, remains the ultimate solution to permanently seal the newly capped well. BP is making progress on relief-well operations started in early May; that well is currently at a measured depth of nearly 18,000 feet.

Operations on the second relief well, which started in mid-May, have been suspended at a measured depth of around 15,800 feet, so they don't interfere with the completion of the first relief well.

BP said workers continue to identify and collect oil on the surface of the sea as well as to collect and clean up oil that has reached shore.

"Since July 15, no new oil has flowed into the Gulf of Mexico" from the well, BP said. "BP believes the static kill and cementing procedures have been successful," the firm said in a statement.

Over the last several days, BP has found smaller quantities of oil to skim. To date, skimming operations have recovered over 826,000 barrels of oily liquid.