BP officials last week announced that the company is aiming to stop the leaking offshore oil well in the Gulf of Mexico by July 27, weeks earlier than its previous target date of mid-to-late August.
The choice of the new target date is not arbitrary. July 27 is when BP executives are scheduled to report second-quarter earnings and to tell investors about the company's current status and future prospects.
Since April 20 when the Deepwater Horizon offshore oil rig exploded and caught fire, killing 11 workers and rupturing the underwater well, BP's stock price has dropped by half. For nearly three months, the damaged well has been spewing oil into the Gulf, fouling coastal beaches and marshes, and driving down the price of BP shares--leaving the company undervalued and potentially vulnerable to hostile takeovers.
As emergency crews work around the clock to stem the flow of oil, BP CEO Tony Hayward is scrambling to slow the falling stock price and to raise enough cash to fend off takeover bids and to help pay damage claims and cleanup costs for the worst catastrophe to hit the Gulf Coast since Hurricane Katrina.
Stopping the leaking oil well by or before July 27 is part of that strategy, a way to demonstrate to investors that perhaps the worst is over for BP and the company can start rebuilding.
To date, however, BP hasn't had much luck stopping the oil leaking from the damaged well. And according to Bob Dudley, head of BP's restoration unit on the Gulf Coast, the company's current strategies and various back-up plans may not be enough to enable them to meet the July 27 deadline.
"In a perfect world with no interruptions, it is possible to be ready to stop the well between July 20 and July 27," Dudley said in an interview with The Wall Street Journal. Dudley acknowledged that the Gulf of Mexico during hurricane season is far from a perfect world, especially for the crews trying to repair a damaged oil well a mile below the surface. He said the prospect of BP stopping the flow of oil by July 27 is "unlikely."
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