BP shares plunge, losing billions in market value, as oil giant tries yet another Gulf oil fix

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BP shares plunge as next Gulf fix gets underway

PORT FOURCHON, La. — BP lost billions more in market value Tuesday as its shares fell steeply on the first trading day since the weekend failure of its latest bid to cap the massive Gulf of Mexico oil spill.

As the British oil giant turned to yet another unproven technology to try and contain the gusher, its share price, which has fallen steadily since the start of the disaster, took a turn for the worse, losing 15 percent to $6.13 in early afternoon trade on the London Stock Exchange.

That was the lowest level in more than a year. The shares have now lost more than a third of their value, wiping some $63 billion off BP’s value, since the explosion at the Deepwater Horizon oil rig six weeks ago.

BP said early Tuesday it had spent $990 million so far on fighting and cleaning the spill, with multiple lawsuits for damages yet to be tallied.

With the ambitious “top kill” having failed over the weekend and a relief well at least two months away, BP turned to another temporary fix, an effort to saw through the pipe leaking the oil and cap it that could be tried as soon as Wednesday. In the meantime, more than 125 miles of the state’s coastline already have been hit with oil, including the resort of Grand Isle near Port Fourchon.

The cleanup, relief wells and temporary fixes were being watched closely by President Barack Obama’s administration. Obama planned to meet for the first time Tuesday with the co-chairmen of an independent commission investigating the spill, while Attorney General Eric Holder was headed to the Gulf Coast to meet with state attorneys general.

Obama’s energy czar, Carol Browner, said she doesn’t want to guess the prospects for success when BP again tries to use a containment cap to control the oil spill.

Interviewed Tuesday on ABC’s “Good Morning America,” Browner said, “I don’t want to put odds on it. … We want to get this thing contained.”

Browner also said she’s concerned about the effect the hurricane season, which began Tuesday, could have on ending the environmental crisis.

To accommodate more than 500 workers hired to clean up the worst oil spill in U.S. history, BP and several subcontractors have set up floating hotels, or “flotels,” made up of steel boxes resembling oversized shipping containers and stacked atop barges.

At Port Fourchon, the oil industry’s hub on the Gulf , a flotel there is the only way to station workers in a massive shipyard surrounded by ecologically sensitive marshes and beaches.

“There are no permanent residents here on the port,” said Dennis Link, a manager from a BP refinery who’s handling logistics at the 1,300-acre site that’s easily accessible by ship, but reachable on land only by a state road that snakes through the bayous.

On Monday afternoon, the living quarters on the flotel sat empty. Generators pumped in cool air and powered the lights, and at the foot of each bunk sat a towel, washcloth and individually wrapped bar of soap. If necessary, four tents on dry land nearby can house 500 more workers. Workers will likely be trucked in on the two-lane state road.

The accommodations on the barge are Spartan, but comfortable — similar to military barracks. Each pod contains 12 bunks, with a bathroom for every four. Per Coast Guard standards, each resident gets 30 square feet of space in the quarters. The barge has 10 washers, 10 dryers and a kitchen, although food will be served in a tent on land. The quarters are typically floated alongside offshore oil rigs to supplement housing on the drilling operations.

Another flotel sits about 15 miles away, off Grand Isle, and BP plans to establish them elsewhere along the coast.

Cleanup efforts are being ramped up while BP also tries the latest in a series of patchwork fixes, this one a cut-and-cap process to put a lid on the leaking wellhead so oil can be siphoned to the surface. The risky procedure could, at least temporarily, increase the oil flowing from the busted well.

Using robot submarines, BP plans to cut away the riser pipe this week and place a cap-like containment valve over the blowout preventer. On Monday, live video feeds showed robot submarines moving equipment around and using a circular saw-like device to cut small pipes at the bottom of the Gulf.

“We are well into the operation to put this cap on the well now,” BP Managing Director Bob Dudley told NBC’s “Today” show on Tuesday.

BP failed to plug the leak Saturday with its top kill, which shot mud and pieces of rubber into the well but couldn’t beat back the pressure of the oil.

The oil company also announced plans Monday to try attaching another pipe to a separate opening on the blowout preventer with some of the same equipment used to pump in mud during the top kill. The company also wants to build a new freestanding riser to carry oil toward the surface, which would give it more flexibility to disconnect and then reconnect containment pipes if a hurricane passed through.

Neither of those plans would start before mid-June and would supplement the cut-and-cap effort.

But the best chances for sealing off the leak are two relief wells, the first of which won’t be ready until August. The spill has already leaked between 19.7 million and 43 million gallons, according to government estimates.

For the relief well to succeed, the bore hole must precisely intersect the damaged well, which experts have compared to hitting a target the size of a dinner plate more than two miles into the earth. If it misses, BP will have to back up its drill, plug the hole it just created, and try again.

“The probability of them hitting it on the very first shot is virtually nil,” said David Rensink, incoming president of the American Association of Petroleum Geologists, who spent most of his 39 years in the oil industry in offshore exploration. “If they get it on the first three or four shots they’d be very lucky.”

The trial-and-error process could take weeks, but it will eventually work, scientists and BP said. Then engineers will then pump mud and cement through pipes to ultimately seal the well.

On the slim chance the relief well doesn’t work, scientists weren’t sure exactly how much — or how long — the oil would flow. The gusher would continue until the well bore hole collapsed or pressure in the reservoir dropped to a point where oil was no longer pushed to the surface, said Tad Patzek, chair of the Petroleum and Geosystems Engineering Department at the University of Texas-Austin.

Wardell reported from London.

(This version CORRECTS to ‘billions’ sted ‘millions’ in graf 3.)