Chronology of Gulf of Mexico oil spill

A drilling rig explosion on April 20 left 11 workers missing and presumed dead, and the rig’s subsequent collapse unleashed a major oil spill that threatens the ecosystems and economy of the U.S. Gulf of Mexico.Also threatened is the heart of U.S. energy production, as a giant, unprecedented underwater leak spreads oil across the northern Gulf of Mexico, threatening areas from Florida to points west of the of the Mississippi River.

President Barack Obama’s plans to widen offshore drilling have been suspended, and energy giant BP Plc (BP.N) (BP.L) faces another blow to its reputation and a multibillion-dollar bill for cleaning up the mess and paying damages.

Below is a chronology of the spill and its impact:

* April 20, 2010 – Explosion and fire on Transocean Ltd’s (RIG.N) (RIGN.S) drilling rig Deepwater Horizon licensed to BP; 11 workers missing, 17 injured. The rig was drilling in BP’s Macondo project 42 miles (68 km) southeast of Venice, Louisiana, beneath about 5,000 feet (1,525 metres) of water and 13,000 feet (4 km) under the seabed. A blowout preventer, intended to prevent release of crude oil, failed to activate.

* April 22 – The Deepwater Horizon rig, valued at more than $560 million, sinks and a five-mile long oil slick is seen.

* April 23 – The U.S. Coast Guard suspends search for missing workers.

* April 25 – The Coast Guard says remote underwater cameras detect the well is leaking 1,000 barrels of crude oil per day. The agency calls the leak a “very serious spill” that threatens ecosystems along the Gulf Coast. It approves a plan to have remote underwater vehicles activate a blowout preventer and stop leak, but the effort fails.

* April 26 – BP’s shares fall 2 percent on fears the cost of cleanup and legal claims will deal the London-based energy giant a heavy financial blow.

* April 27 – U.S. departments of Interior and Homeland Security announce joint investigation. Coast Guard says leaking crude may be set ablaze to slow the spread of oil in the Gulf.

* April 28 – The Coast Guard says the flow of oil is 5,000 barrels per day (bpd) (210,000 gallons/795,000 litres) — five times greater than first estimated. A controlled burn is held on the giant oil slick.

* April 29 – Obama pledges “every single available resource,” including the U.S. military, to contain the spill, which Homeland Security Secretary Janet Napolitano says is of “national significance.” Obama also says BP is responsible for the cleanup. Louisiana declares state of emergency due to the threat to the state’s natural resources.

* April 30 – An Obama aide says no drilling will be allowed in new areas, as the president had recently proposed, until the cause of the Deepwater Horizon accident is known.

* BP Chairman Tony Hayward says the company takes full responsibility and will pay all legitimate claims and the cost of the cleanup. The Interior Department orders safety inspections of all 30 deepwater drilling rigs and 47 deepwater production platforms.

* May 1 – Coast Guard says leak will affect the Gulf shore.

* May 2 – Obama visits the Gulf Coast to see cleanup efforts first hand. U.S. officials close areas affected by the spill to fishing for an initial period of 10 days. BP starts to drill a relief well alongside the failed well, a process that could take two to three months to complete.

* May 5 – A barge begins towing a 98-ton containment chamber to the site of the leak. BP says one of the three leaks has been shut off by capping a valve, but that would not cut the amount of oil gushing out.

* May 6 – Oil washes ashore on the Chandeleur Islands off the Louisiana coast, uninhabited barrier islands that are part of the Breton National Wildlife Refuge and important nesting and breeding areas for many bird species.

* May 7 – BP engineers use undersea robots to move the containment chamber over the larger of the two remaining leaks on the seabed. A fishing ban for federal waters off the Gulf is modified, expanded and extended to May 17.

* May 8 – BP’s containment dome hits a snag when a buildup of crystallized gas forces engineers to postpone efforts to place the chamber over the oil leak and siphon oil to the surface. “Tar balls” suspected to come from the leak wash up along a half-mile stretch of Dauphin Island, Alabama.

* May 9 – BP says it might try to plug the undersea leak by pumping materials such as shredded up tires and golf balls into the well at high pressure, a method called a “junk shot.”

* May 10 – Forecasts suggest the oil spill could move significantly west of the Mississippi River delta as brisk onshore winds prevail. BP announces plans to place a small containment dome, known as a “top hat,” over the blown out well to funnel oil to the surface.

* May 11 – Executives with BP, Transocean and Halliburton appear at congressional hearings in Washington, where Senators criticize their safety records. The executives blame each other’s companies for the explosion. The oil slick washes ashore on a third land mass: Louisiana’s Port Eads area, on the southern edge of the Mississippi Delta.(Reuters)

Crude oil prices climbed to more than $85 per barrel on the New York Mercantile Exchange

NEW YORK, April 29  Crude oil prices climbed to more than $85 per barrel on the New York Mercantile Exchange, as concern over Greek debt abated Thursday.The International Monetary Fund agreed to increase the size of loans to Greece by $100 billion to $160 billion, The New York Times reported. European markets rebounded.

Concern over Greece going into default has shaken markets for months on fears the euro would decline in value.June delivery crude oil gained $2.35 to $85.57 per barrel. Heating oil prices for June added 0.0347 cents to $2.2889 per gallon. Reformulated gasoline blendstock prices for June added 0.345 cents to $2.3675 per gallon. Henry Hub natural gas prices for June lost 0.356 cents to $3.992 per million British thermal units.At the pump, the national average price for unleaded gasoline was $2.877 per gallon Thursday, up from Tuesday’s $2.869, AAA said.(UPI)

Kuwait Open New Oil Storage Center

Sabriya,Kuwait on Thursday opened a new reception center at Sabriya oil fields as part of efforts to encourage the Gulf states to increase oil production to four million barrels per day in 2020. Oil Minister Sheikh Ahmad Abdullah al-Sabah inaugurated the center’s third largest oil fields near Kuwait’s northern border with Iraq. The facility was built by South Korean SK Engineering and Construction Co.. at a cost of 626.7 million dollars, can handle 165 000 barrels of crude per day and 85 million cubic feet of gas.

“The center is one of the facilities that contribute to the strategic direction in 2020,” said Sami al-Rasheed, chairman of the Kuwait Oil Co.., The state-owned company responsible for production. Reception center to the physical separation of crude oil, natural gas, water and other impurities before pumping clean oil, either for export or for gas and oil refineries to power plants.

President SK Choi Kwang-Chul said the project was completed six months ahead of schedule and went online a month ago. Reception center is already scheduled to be completed in September. Original center, about 50 kilometers (30 miles) from the border with Iraq, have been damaged during the invasion of Kuwait in 1990 by Saddam Hussein’s forces. Sheikh Ahmad said the center and a number of other projects are part of a long-term strategy of OPEC member Kuwait to increase production capacity to four million barrels per day.

“Currently, we are able to produce three million barrels per day,” the minister told reporters after the opening ceremony, but declined to say whether this is sustainable for a long time. Kuwait, OPEC’s fourth largest exporter, said that occupy 10 percent of global crude reserves. It had been pumping about 2.2 million barrels per day. (AFP)

U.S. natural gas industry officials on Thursday defended a controversial drilling technique

U.S. natural gas industry officials on Thursday defended a controversial drilling technique known as hydraulic fracturing as the industry braces for possible new government regulations.Hydraulic fracturing injects millions of gallons of water, sand and a proprietary mix of chemicals up to two miles underground where it breaks open fissures in the gas-bearing shale to allow the gas to be extracted.Some environmental groups claim the technique, which is often referred to as “fracking”, is unsafe and threatens supplies of drinking water, but the industry claims its practice is safe.

“There is no known instance where fracking has contaminated someone’s drinking water,” said Will Brackett, the managing editor of the Powell Barnett Shale Newsletter, speaking on an industry panel sponsored by the George W. Bush Institute and Southern Methodist University’s Cox Maguire Energy Institute.Bush, the former U.S. president and Texas oil man, said more natural gas drilling would create more U.S. jobs. Bush did not touch on the hydraulic fracturing debate.

“When you explore for natural gas, when you develop natural gas, when you lay pipelines for natural gas, Americans are working,” Bush said in opening remarks to the conference.Earlier this month, the top U.S. environmental regulator said she was “very concerned” about the practice. The Environmental Protection Agency last week said it will conduct a study of drinking water impacts, which could mean new regulations on a booming area of the energy sector.

An industry scramble to develop vast shale deposits that are estimated to contain enough natural gas to meet U.S. needs for up to a century has brought drilling rigs within the limits of cities like Dallas and Fort Worth.

A bill in Congress would require gas companies to disclose the chemicals used in hydraulic fracturing and give the EPA oversight of the industry, which is now regulated by the states.

Industry officials dismissed any suggestion that their drilling practices were dangerous.”We have had some issues in less than half a dozen cases and they have been mostly mistakes and it is not clear that the issue is directly related to the fracking process itself,” said Randy Foutch, chairman and CEO of privately-held Laredo Petroleum.

Some residents who live near gas rigs in states from Pennsylvania to Wyoming say their water has become undrinkable since drilling companies fractured the wells and they complain of sickness and skin rashes after using the water.

Removing gas from shale rock accounts for 15 to 20 percent of U.S. natural gas production and provides a relatively clean energy source for the United States, which is trying to reduce its dependence on foreign oil.(Reuters)

OPEC price hawks like Iran and Venezuela are happy with present prices near $80 a barrel

VIENNA With U.S. demand for oil lackluster, even traditional OPEC price hawks like Iran and Venezuela are happy with present prices near $80 a barrel as they head into Tuesday’s meeting of the 12-nation organization.These two countries traditionally are the greatest advocates of tight OPEC supply. But ahead of their meeting there is informal unanimity among OPEC oil ministers that – with the world’s economic recovery feeble at best and crude prices at preferred levels – it’s best not to rock the boat.

That means the ministers will likely agree to maintain OPEC’s formal production target, now at 26 million barrels a day – a benchmark set over one year ago.OPEC has left its members’ production quotas unchanged since December 2008, when it announced the last of a series of cuts aimed at bringing their output down by 4.2 million barrels per day. The cuts helped engineer a rebound in crude prices, which had collapsed to the low $30s from a mid-2008 high of almost $150 per barrel.

Since the oil ministers last met three months ago, prices mostly have hovered between $70 and $80 a barrel – a range that most OPEC nations have factored into their national budgets this year. That has kept even hardliners Iran and Venezuela on board with other OPEC members.”OPEC should not take any decision to change production,” Iranian oil minister Masoud Mirkazemi told reporters in Tehran on Monday, echoing comments voiced by Rafael Ramirez, his Venezuean counterpart.Still, there will be behind-the-scenes pressure on some members to produce less by honoring their allotted targets.

At close to 27 million barrels a day, OPEC now is producing a daily 600,000 barrels above its official target – a result of cheating by individual nations on their quotas. While OPEC does not reveal which nations are overproducing, the Paris-based International Energy Agency put overall quota compliance within OPEC at only 58 percent in January.World oil demand is expected to rise this year due to surging economic activity in Asian countries, especially China. The IEA, which advises oil-consuming countries, predicts that the world’s appetite for crude will average 86.6 million barrels a day this year, or 1.6 million barrels a day more than 2009’s 86.5 million barrels.Still, oil markets remain concerned about shaky demand in the U.S. Crude consumption there and in other top industrialized nations is expected to contract in 2010 for the fifth consecutive year.(AP)

SINGAPORE Oil prices hovered above $78 a barrel Friday in Asia amid mixed signals about global crude demand

SINGAPORE Oil prices hovered above $78 a barrel Friday in Asia amid mixed signals about global crude demand.Benchmark crude for April delivery was up 16 cents to $78.33 a barrel at midday Singapore time in electronic trading on the New York Mercantile Exchange. The contract fell $1.83 to settle at $78.17.

Oil prices have bobbed between $70 and $80 for most of the last six months as investors mull growing crude demand in developing countries such as China offset by flagging consumption in developed countries.Even a cold winter in the U.S. has failed to boost demand for heating oil.”The absence of any sustained seasonal draw in heating oil inventories is still striking,” Barclays Capital said in a report. “The inventory overhang remains stubbornly high.””We continue to expect strong demand growth from China in 2010.”

Crude prices were bolstered by a weaker U.S. dollar, as dollar-based commodities such as oil become cheaper for investors with other currencies when the dollar falls. The euro rose to $1.3585 on Friday from $1.3547 the previous day.In other Nymex trading in March contracts, heating oil fell 0.37 cent to $1.9825 a gallon, while gasoline rose 0.87 cent to $2.0457 a gallon. Natural gas prices gained 4.8 cents to $4.815 per 1,000 cubic feet.In London, Brent crude was up 10 cents at $76.39 on the ICE futures exchange.(AP)

OPEC ministers say must focus on compliance

OPEC

LUANDA, Angola Several OPEC ministers say the oil producing group has decided to hold its output targets unchanged and wants members to adhere more closely to their quotas.Oil ministers from Angola, Algeria, the United Arab Emirates and Libya all said Tuesday the group has decided to hold steady its production quotas.

The decision was widely expected as the 12-member Organization of the Petroleum Exporting Countries has voiced comfort with current oil prices and is wary of taking a step that could shock the market and undercut the ongoing fragile global economic recovery.

“Yes, we are talking about compliance. We are calling for member compliance,” said Shukri Ghanem, the head of Libya’s National Oil Corp. and that country’s de facto oil minister. Ghanem said there would be “no change” with quotas.