US regulators were investigating BP Plc on Monday for possible insider trading related to its Gulf of Mexico oil spill, dealing a potential blow to the energy giant's efforts to restore investor confidence. Two sources familiar with the preliminary Securities and Exchange Commission investigation said the alleged insider trading took place after the start of the BP oil spill on April 20.
The SEC is also investigating whether the British company properly disclosed information on risks related to its deepwater oil operations in the Gulf, one of the sources said. A BP spokesman did not immediately return calls for comment, but the investigation comes at a bad time for the British company. It is trying to rehabilitate its image and tamp down widespread public anger in the United States over its handling of the spill, the worst in US history. BP was preparing to deliver the first of what it hopes will be two knockout blows to "kill" its Gulf well, 105 days since the start of a leak that led to the US environmental disaster.
The White House said it was "cautiously monitoring" the situation as BP engineers, mindful of previous setbacks to permanently seal the well, conducted final tests on Monday. The tests will show whether BP can move ahead on Tuesday with its planned "static kill" - when it will inject heavy drilling mud into the top of the well to push oil back where it came from: a reservoir 13,000 feet/ (4,000 metres) beneath the seabed.
"When we've done that ... we will have killed the well," said Kent Wells, BP's senior vice president of exploration and production. To ensure the ruptured well is permanently sealed, BP will also proceed with its plans for a relief well that will intersect the damaged well and pump more heavy drilling mud and cement in from below to plug any openings.
Wells said the company expected the relief well to intercept its blown-out Macondo well between August 11-15. A permanent seal to the well will end the months-long technical nightmare for BP that began April 20 with an explosion on a rig 50 miles/80 km off the Louisiana coast.
Millions of gallons/litres of crude spewed into the ocean after the blast, which killed 11 workers and ruptured the well a mile/1.6 km beneath the surface of the sea. But even when the well is finally capped, the environmental disaster will be far from over and its political and financial implications will reverberate for some time to come.
Gulf fishing communities and business owners are still counting the costs of the worst offshore oil spill in US history that forced the closure of large swaths of rich fishing grounds and dealt a severe blow to tourism. BP managed to put a tight-fitting cap on the well two weeks ago that temporarily stopped the flow of oil into the ocean.
But after months of uncertainty, BP investors are looking for a permanent solution to a disaster that has cost the company billions of dollars in cleanup costs, tarnished its reputation in the United States and left it facing numerous lawsuits and possible criminal charges. "When they say BP has permanently killed the well, I think BP is pretty much a good buy," said Mark Coffelt, chief investment officer at Empiric Advisors in Austin, Texas.
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