US Oil Industry Under Pressure as Gulf Relief Effort Forges Ahead

4 May 2010 (Last Updated May 4th, 2010 18:30)

The US oil and gas industry could be on a downward spiral as industry practises come under intense scrutiny after the massive oil spill in the Gulf of Mexico following the explosion of the Transocean-owned Deepwater Horizon platform last week. Teams of oil spill workers today are takin

The US oil and gas industry could be on a downward spiral as industry practises come under intense scrutiny after the massive oil spill in the Gulf of Mexico following the explosion of the Transocean-owned Deepwater Horizon platform last week.

Teams of oil spill workers today are taking advantage of good weather in the Gulf of Mexico to carry on the fight to contain the growing slick before winds turn against them.

Yesterday, BP deployed a giant steel containment device, to be placed over the biggest of three leaks on the seabed, which is expected to be shipped out to the site today for operation within the next six days.

The British supermajor has also started drilling a relief well, but that could take two or three months to complete.

The spill has forced US President Barack Obama to suspend plans to expand offshore oil drilling, unveiled in the Whitehouse last month.

The ban could see oil and gas exploration plans be on put hold for some time, according to independent oil analyst Richard Miller.

"This could have long-term repercussions although it would be an overreaction by authorities to halt ongoing drilling," Miller told offshore-technology.com.

BP said it is keen to corporate with US authorities to fulfil its legal responsibility for the clean-up operation while Transocean has remained largely quiet except to say it is not willing to speculate on what went wrong.

"The US government leadership here has been excellent since day one. I agree with the President that the top priority now is to stop the leak and mitigate the damage. I reiterated my commitment to the White House today that BP will do anything and everything to stop the leak, attack the spill offshore and protect the shorelines of the Gulf Coast, BP boss Tony Hayward said in a statement.

BP's share prices took a nosedive and have since stabilised after falling 17% in the two weeks since the spill began. US oil prices tumbled 4% to $82.74 a barrel as traders downplayed the threat to production and shipping, reports Reuters.

Earlier this week, democratic Senator Bill Nelson of Florida asked the Interior Department's inspector general to investigate whether regulations covering back-up systems to cap underwater wells were adequate, increasing pressure on oil and services companies to review safety practises.

The House Oversight and Investigations Reform Committee is also investigating the incident and wants to know why the Interior Department has not mandated the shut-off switches, which are compulsory in other countries.