Inaccurate Estimates of BP (NYSE:BP) Gulf Oil Flow Affected Plugging

The release of a report from a federal commission investigating the BP (NYSE:BP) oil spill found the Obama administration made a number of mistakes throughout the ordeal.

One was the estimates proffered by the government which were far less than later estimates. Original oil flow estimates out of the damaged well were from 1,000 to 5,000 barrels a day, while later estimates were up to 62,000 barrels a day.

On that the report concluded, “By initially underestimating the amount of oil flow and then, at the end of the summer, appearing to underestimate the amount of oil remaining in the Gulf, the federal government created the impression that it was either not fully competent to handle the spill or not fully candid with the American people about the scope of the problem. It is possible that inaccurate flow-rate figures may have hindered the subsea efforts to stop and to contain the flow of oil at the wellhead.”

While the report is accurate on its assessment of the oil flowing into the Gulf, it's not clear at all that government estimates of the remaining oil in the Gulf is inaccurate, as followup studies have confirmed much of what they originally said.

There's always going to be the so-called scientists who are going to dispute the amount of oil left in the Gulf because of private agendas and hopes of securing research money.

As far as the effect of the amount of oil being released into the Gulf being understated, the report said it could have disrupted the efforts of BP to stop the flow.

BP (NYSE:BP) Stops Oil Leak First Time Since Explosion on Deepwater Horizon

For the first time since oil starting spilling into the Gulf of Mexico, BP (NYSE:BP) has managed to stop the leak during a test of their new containment cap. The share price of BP skyrocketed by over 7 percent as the news circulated and investors fought to get in on the action before close.

Other oil companies with exposure also moved up on the news, with Anadarko Petroleum (NYSE:APC) and Transocean (NYSE:RIG) also making significant moves before the trading session ended, with Anadarko moving up by 3.15 percent and Transocean by 4.47 percent.

Anadarko and BP kept on moving up in electronic trading.

Testing will continue until it is proven the cap can continue to keep the oil from flowing, which at this time isn't a certainty, although this step had to be successful to continue on.

BP has also said if oil stops flowing into the Gulf, it means the oil well isn't leaking anywhere else, which would be a good sign. That seems to be the case, and soon we'll know if the cap will stop the flow until the relief well is complete and permanently plugs the well.

BP (NYSE:BP) Close To Placing Better Cap on Oil Leak

By the end of June, BP (NYSE:BP) should have an improved cap over the oil well now leaking oil into the Gulf, and it could be within a week if everything goes right, according to Coast Guard Admiral Thad Allen, who is representing the U.S government in overseeing the matter.

The practicals of it are the existing containment cap will be removed and then replaced with a larger one, which not only can capture more oil, but also allow those vessels processing or burning off the gas and oil to disconnect and move to safer waters in case of a hurricane.

One important additional element of the new cap will be a sensor which should give a more accurate reading of rate the oil is actually leaking into the Gulf; something no one has yet to get a handle on.

Government scientists have estimated a daily oil leak of 35,000 to 60,000 barrels, while the worst-case scenario from BP is as high as 100,000 barrels of oil a day gushing into the Gulf.

Once the cap is in place, there will be another vessel included in the processing of the oil, which could capture up to 53,000 barrels a day.

By the middle of July, BP hopes to be able to capture up to 80,000 barrels of day if that much is actually spilling into the ocean.

So far BP has captured 231,190 barrels of oil since the cap system has been in place.

BP (NYSE:BP) Capturing More Oil

BP (NYSE:BP) attempts to capture more oil are improving, now standing at about 630,000 gallons a day, with the possibility of increasing to 756,000 a day, before a second tanker arrives to expand the capture rate.

Original estimates as to how much the existing tanker in the are can process has been upwardly revised, giving the company better results than expected in the short term.

There is another vessel coming into assist as well, in this case a shuttle tanker from the North Sea which will help in transporting the oil, along with a device which will be used to burn off excess oil they can't process.

Efforts are under way to build an even better containment cap which is expected to be ready sometime in July.

BP (NYSE:BP) Captures 42,500 Barrels in Four Days

BP (NYSE:BP) continues to increase it level of capturing oil with the cap in place, reaching over 14,000 barrels on Monday, and approaching its limitations as to how much the vessel it's being collected on can handle, which is 15,000 barrels a day.

In response, BP is bringing a second ship into the region which can process from between 5,000 and 10,000 barrels of oil a day. This is a good sign as to the extent of the success of the effort, although the second ship will take another two to three days to reach the area.

Since they successfully fitted the cap four days ago, BP has captured 42,500 barrels of oil, and next month an even better cap is expected to be put in place which will capture even more and plug the leaking oil well better.