More leak control helps BP but spill menaces Florida – Reuters
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* Containment cap progress boosts BP shares
* Up more than 2 pct in London trading
* Nordic bank divests all its BP shares
* Oil spill now threatening tourism-dependent Florida
* Gulf spill subject of three congressional hearings
(Recasts, adds analysts, Nordic bank, BP shares)
By Anna Driver and Tom Bergin
VENICE, La./LONDON, June 7 (Reuters) – Shares of BP Plc
(BP.L) gained on Monday after it announced progress in
containing its Gulf of Mexico oil leak but the energy giant
still faced tough questions from investors and U.S. lawmakers
as the spill threatened more of the U.S. Gulf coast.
Spilled oil is now looming off white sand tourist beaches
in northwest Florida, depositing tar balls and debris on some,
after soiling stretches of coast in Louisiana, Mississippi and
Alabama in the worst U.S. environmental disaster.
During the weekend, BP announced advances in controlling
the undersea leak through a containment cap over the blown-out
wellhead, giving estimates of captured oil that suggest a
significant portion of the escaping crude is being collected.
But a live video feed of the seabed leak still shows black
crude billowing out a mile (1.6 km) down in the Gulf of Mexico,
and BP and government officials have said a definitive solution
will only come in August when a relief well is drilled. This
will intersect the leaking well and allow it to be sealed.
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BP shares have lost about one-third of their value since
the crisis began but in London on Monday they were up more than
2 percent. The rise came on the news of progress in the
operation of the lower marine riser package (LMRP) containment
cap put in place late last week.
“At last we have seen some positive news from BP,” said
Peter Hitchens, oil analyst at Panmure Gordon.
“With the right LMRP efficiency and surface skimming
response, we may have turned the corner on shoreline oil spill
volumes,” analysts at Credit Suisse said in a research note.
Despite the more encouraging news, U.S. President Barack
Obama still faces criticism that he has not taken a forceful
enough leadership role in tackling America’s worst oil spill,
which was in its 49th day on Monday.
I trust that what you’ve read so far has been informative. The following section should go a long way toward clearing up any uncertainty that may remain.
BP, which said it had so far spent about $1.25 billion on
the response effort, says an additional system to capture more
of the leaking oil using equipment previously developed for a
failed “top kill” attempt to plug the well could allow the
company to siphon off the vast majority of the leaking oil.
This system could be operating in mid-June, a spokeswoman
said.
Nordic bank Nordea (NDA.ST) said it divested all its BP
shares, worth about 10 million euros ($11.94 million), from its
funds and would halt further investment in the British oil
company until further notice. [ID:nN07147206]
BP, whose shares have lost about one-third of their value
since the crisis began, has vowed to pay all legitimate damages
claims of those harmed by the disaster.
BP said its containment cap had captured 16,600 barrels of
oil (697,200 gallons/2.64 million litres) between June 3 and
June 6 and it expects an increase in volumes of both oil and
gas collected in the next several days.
On June 5, a total of 10,500 barrels of oil was collected
by the cap. U.S. government estimates put the well’s leak at
12,000 to 19,000 barrels a day, but some independent scientists
have said they believe it is much higher. Maximum collection
capacity of the existing containment cap is 15,000 bpd.
“INSULT TO NATURE”
The weekend progress came as the company’s chief executive,
Tony Hayward, insisted he had no plans of quitting over his
handling of the environmental disaster, marked by a string of
failures since the April 20 rig explosion that triggered the
oil spill. [ID:nLDE65503H]
The vast extent of the environmental impact of the spill is
only gradually becoming apparent.
“It’s just wrong,” David Yarnold, executive director of the
nonprofit Environmental Defense Fund, said after touring
Louisiana’s Barataria Bay by boat on Sunday.
“Water is not supposed to look like gasoline and shouldn’t
have big globs of crude in it,” he said, describing the oily
sheen and large pools of thick, gooey rust-colored oil in the
water he saw. “It’s just an insult to nature.”
Executives from Transocean Ltd (RIG.N), Halliburton (HAL.N)
and Anadarko Petroleum Corp (APC.N) — central players in rig
disaster — were to appear at an energy conference in New York
on Monday, under pressure to explain how the spill happened and
discuss its ramifications.
Transocean operated the rig and Halliburton cemented the
work. Anadarko owns 25 percent of the well.
On Wednesday, BP gives its annual statistical review.
This week also will feature three hearings by various
committees of the U.S. Congress — two in Louisiana, on Monday
and Wednesday, and one in Washington on Thursday — where BP’s
handling of the crisis will come under scrutiny.
Representative Edward Markey, chairman of the House energy
and environment subcommittee, asked BP for more details on
Sunday of how much oil had spilled in order “to determine BP’s
financial liability in terms of fines, which could be as high
as $4,300 per barrel.”
ALTERNATIVE ENERGY
The Obama administration has delayed plans to increase
offshore drilling as a result of the spill. The crisis has put
Obama on the defensive and distracted his team from the
domestic agenda — a new energy policy, reform of Wall Street
and bolstering a struggling U.S. economy.
Obama wants to tap into public anger over images of
polluted beaches and fishing grounds to press for faster
development of alternative energy.
Oil began leaking from the well after the rig exploded,
killing 11 workers. BP faces a criminal investigation,
lawsuits, dwindling investor confidence and questions about its
credit-worthiness.
After contaminating wetland wildlife refuges in Louisiana
and barrier islands in Mississippi and Alabama, the black tide
of crude has started to hit some of the famous white beaches of
Florida, where tourism accounts for nearly 1 million jobs.
Fully one-third of the Gulf’s federal waters, or 78,603
square miles (202,582 square km), remains closed to fishing,
and the toll of dead and injured birds and marine animals,
including sea turtles and dolphins, is climbing.
(Additional reporting by Bruce Nichols in Houston, Tom Brown
in Miami, Jeff Mason in Kenner, Louisiana, Kelli Dugan in
Orange Beach, Alabama, Sarah Irwin in Buras, Louisiana, Jane
Ross in Pensacola and Lisa Lambert in Washington; Writing by
Mark Egan and Pascal Fletcher; Editing by Bill Trott)
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