Deepwater Horizon sinks, many still missing as oil predicted to reach coast

Mikaila Adams
Associate Editor, OGFJ

UPDATE: The fire that broke out the night of April 20, 2010 on Transocean's Deepwater Horizon in the US Gulf of Mexico has sunk the semisubmersible drilling rig 41 miles offshore Louisiana with eleven crewmembers still missing and the emergence of an apparent oil spill.
The rig, on lease in the Mississippi Canyon block 252 was being operated by BP Exploration & Production Inc. 

Click to EnlargeTransocean and the US Coast Guard report the majority of the 126 rig personnel is safe, but eleven crew members remain unaccounted for as the ship sank Thursday.

The Coast Guard has verified an oil slick measuring 1 mile by 5 miles coming from the site of the sunken ship. The last figure reported by a press conference with Transocean, the US Coast Guard, the US Dept. of Interior was roughly 8,000 bbl of crude spilled into the Gulf of Mexico. Additionally, the pontoons on the rig held about 700,000 gallons of diesel fuel.  

AccuWeather predicts prevailing southerly winds in the area of the rig site may push oil towards the Louisiana and Mississippi coastline.

"We are determined to do everything in our power to contain this oil spill and resolve the situation as rapidly, safely and effectively as possible," said Group Chief Executive Tony Hayward. "We have assembled and are now deploying world-class facilities, resources and expertise, and can call on more if needed.

Transocean has not yet determined the cause of the accident. 

The rig's current contract with BP had an adjustable day rate estimated to earn Transocean $458,000 beginning in March 2008 and $517,000 in September 2010. Last fall, BP won a three-year contract extension for the Deepwater Horizon to begin at the end of the current contract in September 2010 at a rate of $497,000 per day. 

Capable of operating in water depths up to 10,000 feet, the Deepwater Horizon entered service in 2001 and recently set the world record for the deepest oil and gas well at 35,050 feet total vertical depth, drilled for BP at the Tiber prospect.

Shares of Transocean were down 1.1% the morning after the explosion. Shares traded today at a high of $90.53 and a low of $88.71.

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