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BP given two days to stem oil leak

By unknown | Jun 14, 2010 | COMMENTS [ 0 ]

BURAS - BP faced renewed US pressure yesterday to do more to contain the Gulf of Mexico oil spill, as the United States and Britain tried to avert a potentially damaging row over the crisis.

BURAS - BP faced renewed US pressure yesterday to do more to contain the Gulf of Mexico oil spill, as the United States and Britain tried to avert a potentially damaging row over the crisis.

The British energy giant placed a containment cap on its blown-out seabed well this month, but oil continues to gush into the ocean, polluting beaches and wildlife habitats, killing marine life and threatening tourism and fishing.

US Coast Guard Rear Admiral James Watson told BP in a June 11 letter made public on Saturday that its containment plan did not go far enough or include enough back-up measures in the event of equipment failure or other problems.

He gave the company two days to come up with a fix.

"BP must identify in the next 48 hours additional leak-containment capacity that could be operationalised and expedited," Watson said in the letter.

Millions of gallons of oil have poured into the Gulf since an April 20 offshore rig blast killed 11 workers and blew out the BP well. The partly contained leak is estimated at 40000 barrels a day.

Frustration over the handling of the spill has grown in the US, with lawmakers calling on President Barack Obama to take a harder line on BP, which has lost tens of billions of dollars in market value during the 55-day crisis.

Senior British officials, however, have tried to bolster London-based BP, warning about the economic impact of destabilising a company that is a staple holding of British pension funds.

Obama told British Prime Minister David Cameron on Saturday that he had no interest in undermining the value of BP.

In a 30-minute phone call the two leaders played down tensions over the oil spill and reaffirmed close ties. But a US official said Obama would insist that BP pays clean-up costs and meets economic claims from the spill.

BP is under pressure from some US lawmakers to suspend its dividend valued at about $10,5billion (R80,7billion) annually until the Gulf crisis is resolved and damages are paid to individuals and businesses in the region.

BP's board, which has met weekly during the crisis, could take up the issue today. But a source said a decision may not be made until after BP chairperson Carl-Henric Svanberg has met with Obama at the White House on Wednesday.

Cameron, who took office last month, is under political pressure in Britain to do more to protect a company that accounts for 12percent of all dividends paid by British companies.

BP expects the total bill for the Gulf oil clean-up to be $3billion to $6billion (R46 billion) - many stock analysts predict the cost will be much higher.

The Cameron and Obama reaffirmed their confidence in the strength of the two countries' ties.

"President Obama said to the prime minister that his unequivocal view was that BP was a multinational global company and that frustrations about the oil spill had nothing to do with national identity," Cameron's office said.

Before meeting with Svanberg, Obama - facing criticism at home for not responding aggressively enough to the spill - is due to return to the Gulf Coast today for the fourth time since the crisis erupted.

About a third of Gulf of Mexico federal waters remains closed to fishing, and oil has spread to Florida's Pensacola and Perdido passes, two gateways to the Gulf Intracoastal Waterway.

US officials have said that the collection of oil and gas leaking into the Gulf seems to have leveled at about 15400 barrels a day - less than half the estimated daily leak.

States along the Gulf coast are demanding financial compensation from BP as the spill spreads along their shorelines, slamming tourism and fishing industries, the Wall Street Journal reported.

Florida attorney general Bill McCollum sent a letter to BP requesting that the company deposit $2,5billion (R19billion) into an escrow account to cover potential losses.

The oil spill was due to dominate yesterday's news talk shows in the US.

Coast Guard Admiral Thad Allen, who is overseeing the federal response, was due to appear on CBS's Face the Nation and CNN's State of the Union. Mississippi governor Haley Barbour, Alabama Governor Bob Riley, both Republicans, and independent Florida governor Charlie Crist were due to appear on yesterday's show. - Reuters


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