Setback as BP halts projects to cap well

BP froze activity on two key projects yesterday which were meant to choke off the flow of oil billowing from its broken well in the Gulf of Mexico, after days of moving confidently toward controlling the crisis.

The development was a stunning setback after the oil giant finally seemed to be on track following nearly three months of failed attempts to stop the spill, which has sullied beaches from Florida to Texas and decimated the multi-billion dollar fishing industry.

The oil giant and the government said more analysis was needed before testing could proceed on a new temporary well cap – the best hope since April of stopping the geyser. Work on a permanent fix, relief wells that will plug the spill from below with mud and cement, was also halted.

Oil continued to spew nearly unimpeded into the water, with no clear timeline on when it would stop. BP shares were down 2.5% in afternoon trading in London after recouping some of their oil spill losses earlier this week, when the cap project seemed to be moving ahead.

BP had zipped through weekend preparations for getting the 75-ton cap in place and undersea robots locked it smoothly into place on Monday atop the well, raising hopes the gusher could be checked for the first time since the Deepwater Horizon rig leased by BP exploded on April 20, killing 11 workers.

Wells said that it was the government’s call late on Tuesday to re-evaluate plans for testing the new cap, and plans were on hold for at least 24 hours.

The run-up to the now-delayed testing process was being closely monitored by Washington. Allen, who came to BP’s US offices in Houston on Tuesday, also met with Energy Secretary Steven Chu and US Geological Survey head Marcia McNutt, along with BP and industry representatives. And President Obama has been receiving multiple daily briefings on the work’s progress, his adviser David Axelrod said.

Wells did not commit with certainty to going forward with the testing, which would shut off the leak by closing valves on the cap and watching to see if it could hold the pressure from oil and gas in the well. Wells suggested other oil collection options might be redeployed.

Work on a permanent fix, a relief well that would plug the leak with heavy drilling mud and cement, was halted for up to 48 hours as a precaution, because it’s not yet clear what effect the testing of the new cap could have on it.