NEW ORLEANS - BP's effort to drill a relief well through 2½ miles of rock to stop the Gulf spill is on target for completion by mid-August, the oil giant said Friday. But BP's stock tumbled anyway over the mounting costs of the disaster and the company's inability to plug the leak sooner.
The relief well is considered the best hope of halting the crude that has been gushing since April 20 in the biggest offshore oil spill in U.S. history.
The crew that has been drilling the relief well since early May ran a test to confirm it is on the right path, using a tool that detects the magnetic field around the casing of the original, blown-out well.
"The layman's translation is, 'We are where we thought we were,'" said BP spokesman Bill Salvin.
Several such tests are necessary, since drilling sideways into the original well casing requires boring through more than 13,000 feet of rock to hit a target 9 inches in diameter, or about the size of a dinner plate.
Once the new well intersects the ruptured one, BP plans to pump heavy drilling mud in to stop the oil flow and plug it with cement.
Despite the encouraging news, BP stock tumbled 6 percent in New York on Friday to a 14-year low on news that BP has now spent $2.35 billion dealing with the disaster.
BP has lost more than $100 billion in market value since its deep-water drilling platform blew up, and its stock is worth less than half the $60 or so it was selling for on the day of the explosion.
Meanwhile, the forecasters and the oil company kept an eye on an area of low-pressure in the Caribbean that threatened to turn into the first tropical depression of the Atlantic season.
The effort to capture the oil gushing from the sea bottom could be interrupted for up to two weeks if a storm forces BP to move its equipment out of harm's way, said Coast Guard Adm. Thad Allen, the government's point man on the crisis.
In other news:
- A financial disclosure report released Friday shows that the Louisiana judge who struck down the Obama administration's six-month ban on deep-water drilling in the Gulf has sold many of his energy investments. U.S. District Judge Martin Feldman still owns eight energy-related investments, including stock in Exxon Mobil Corp. Among the assets he sold was stock in Transocean, which owned the rig that exploded.
- Labor Secretary Hilda Solis slammed BP - along with Massey Energy, owner of the West Virginia coal mine where 29 workers died in an explosion in April - saying they need better safety measures. "We are not saying go out of business," she said. "Do your job better. Make an investment in your employees. We want you to make a profit, but not at the expense of killing your employees."
- Vice President Joe Biden will head to the Gulf on Tuesday to visit a command center in New Orleans and the oil-fouled Florida Panhandle.
- The IRS said payments for lost wages from BP's $20 billion victims compensation fund are taxable just like regular income. Payments for physical injuries or property loss are generally tax-free.
BP is drilling two relief wells, in case the first one misses its mark. The first one, started May 2, reached a depth of 16,275 feet Wednesday - including about 5,000 feet of water - before workers paused for the test. Although the relief well is only 200 feet laterally from the original well, the crew still has to drill about 2,000 feet deeper before it can intercept the original well, according to Salvin. The second relief well, started on May 16, has reached a depth of 10,500 feet.
The biggest oil spill ever in the Gulf of Mexico - an undersea gusher in Mexico that started in the summer of 1979 and leaked 140 million gallons - was eventually stopped with two relief wells. By some estimates, the BP spill could eclipse that disaster in a week or two; the spill has been put at somewhere between 69 million and 132 million gallons.
BP would need about five days to secure or move all its equipment to safety from an approaching storm but is working to shorten that to two days, Salvin said. The equipment includes ships that are processing the oil sucked up by the containment cap on the well and the rigs drilling the two relief wells.
An Air Force reconnaissance plane was on its way to investigate the low-pressure area Friday and learn whether it might develop further. Forecasters said there was an 80 percent chance it would develop into a tropical depression.
BP is capturing anywhere from 840,000 to 1.2 million gallons of oil a day. Worst-case government estimates say 2.5 million gallons a day are leaking from the well, though no one really knows for sure.
BP is working to develop a different containment system that would be easier to disconnect and hook back up if a storm interrupted the work.