BP costs in oil spill hit $1.25bn

BP said that its costs for the oil spill in the Gulf of Mexico spill have reached $1.25 billion (�870 million) as it set out plans to place a second cap on the leak. The company confirmed that it would build on its success of last week, when an initial containment cap was installed, by installing a second, longer-lasting system. It is also pressing ahead with the drilling of two relief wells, which are scheduled to be completed by August. The first containment cap was placed over the leaking well after a riser pipe was ruptured. The new cap would redirect the oil and gas to a new free-floating riser about 300ft below sea level. The system is intended to allow the company to suspend operations and move if hurricanes strike the region. BP said that its costs exclude the $360 million in funds for the Louisiana barrier islands construction project, a new research facility into oil disasters which BP signed up to last week. The official leading the US Government's response to the oil spill in the Gulf of Mexico warned against celebration as BP claimed to have got a partial grip on the leak nearly seven weeks after the explosion on the Deepwater Horizon rig. Bob Fryar, vice-president of the oil company, had said that he was "pleased" by the success of a containment system that is filtering off 10,000 barrels (420,000 gallons) of oil a day. In response Admiral Thad Allen, the US Coast Guard commandant, said: "I don't think anybody should be pleased as long as there's oil in the water." He compared the slick to an enemy that was "holding the Gulf hostage" as it claimed more land, livelihoods and wildlife. "There will be oil out there for months to come. This is a siege. It's going to go on for a long time," he said. "This is a war, an insidious war, and it's attacking four states at one time." The 'cut-and-cap' technique carried out by subsea robots last week succeeded in capturing what BP said was nearly half the daily flow from the Macondo well between midnight on Friday (4th) and midnight on Saturday (5th June). Tony Hayward, the chief executive, said that further improvements would be made to the containment system this week, allowing it to capture "probably the vast majority" of the leak. BP's triumph on the seabed was tempered by the worsening situation on the surface. In Louisiana, birds sat trapped and exhausted in a thick tide of oil, prompting a demonstration in New Orleans by protesters dressed as dead and ailing birds. Beaches in Florida, Alabama and Mississippi were sticky with tarballs. Civic officials in Alabama complained of a "nightmare" blighting their communities' economies and ecologies, and scientists predicted that the Gulf's recovery could take decades. Questions remain over precisely how much has leaked, how much is still leaking, and how much can be captured. A scientific task force appointed by the US Government estimated last month that between 12,000 and 25,000 barrels (504,000 to 1.05 million gallons) a day have been leaking from the well.