Energy giant BP Plc said Monday it has successfully cemented the Macondo well in the Gulf of Mexico and no new oil has flown into the sea since mid-July, as the cost of the response to the catastrophic spill climbed to $6.1 billion. “BP believes the static kill and cementing procedures have been successful,” the firm said in a statement. Meanwhile, retired Coast Guard Adm. Thad Allen said Monday that cement forced down from the top of the crippled well last week has hardened enough that workers could begin drilling the final 100 feet of the relief well. Engineers were drilling 20 or 30 feet at a time, then pausing to make sure they were still on the correct course to hit the broken well. It could be the end of the week before the wells intersect. The relief well will be used to pump more cement and mud into the busted well to permanently seal the source of the oil that spilled into the Gulf for nearly three months. Cementing operations on the Macondo well were completed last Thursday and pressure testing has shown that there was an effective cement plug in the casing. BP's Tests show the cement plug is working and the seal is holding on its troubled well in the Gulf of Mexico. A relief well, however, remains the ultimate solution to permanently seal the Macondo well. BP is making progress on relief-well operations started in early May; that well is currently at a measured depth of nearly 18,000 feet. Moreover, a US Justice Department official says negotiations with BP have been completed to ensure that the oil company follows through on a commitment to establish a $20 billion compensation fund for victims of the Gulf oil spill. The official calls the conclusion of negotiations an important step forward for BP to honor the promises it made regarding the fund. Speaking on condition of anonymity about the arrangements that will be announced later Monday, the official said the Obama administration looks forward to completing a security agreement with BP so that all necessary funds will be there. The security agreement is necessary in case something were to happen to a company subsidiary that established the trust. Operations on the second relief well, which started in mid-May, have been suspended at a measured depth of around 15,800 feet, so they don't interfere with the completion of the first relief well. BP said workers continue to identify and collect oil on the surface of the sea as well as to collect and clean up oil that has reached shore. “Since July 15, no new oil has flowed into the Gulf of Mexico” from the well, BP said. Over the last several days, BP has found smaller quantities of oil to skim. To date, skimming operations have recovered over 826,000 barrels of oily liquid. BP also said that the cost of the spill response has soared to around $6.1 billion. In the middle of June, the firm announced the creation of a $20 billion escrow account to meet its obligations arising from the spill. BP has also said it plans to dispose of up to $30 billion of assets in order to ensure it has enough cash on hand to cover the spill costs. Last week, it agreed to sell its oil and gas exploration business in Colombia to a consortium of Ecopetrol, Colombia's national oil company, and Talisman of Canada, for $1.9 billion in cash.
