BP said it was making progress on plugging its ruptured Gulf of Mexico oil well today as US government figures showed the disaster has eclipsed the previous worst US oil spill, the Exxon Valdez.
Calling the spill an unprecedented disaster, an "angry and frustrated" US president Barack Obama announced a six-month extension of the moratorium on permits for new deepwater oil drilling while a commission investigates the disaster.
Mr Obama lashed out at the oil industry's cozy and "sometimes corrupt" relationship with regulators in the past and said this had led to lax or little regulation. He said the Gulf of Mexico spill underscored the need for tighter regulation.
Million of gallons of oil have poured into the Gulf since an April 20th blast on the Deepwater Horizon rig that killed 11 workers and triggered the spill, soiling 160km of coastline and threatening some of the country's richest fisheries.
The political fallout from the spill claimed its highest-profile victim as the head of the government agency that oversees offshore oil drilling resigned.
Mr Obama's move to extend the drilling moratorium move is a setback to offshore exploration and a potential blow to his own energy overhaul bill.
BP managing director Robert Dudley said a complex "top kill" operation started yesterday to try to halt the seabed well's flow by pumping heavy drilling fluids into it was "moving the way we want it to." But he told NBC's Today Show it was too early to say whether it had been successful.
Coast Guard Admiral Thad Allen, who is leading the oil spill response, told WWL, a CBS radio affiliate in New Orleans, that officials were "cautiously optimistic" that the top kill was working.
"They're in a period of kind of wait-and-see right now, where they see how the well stabilizes," Mr Allen said.
BP spokesman David Nicholas said later the operation was continuing but there was no immediate update on whether it has succeeded. He noted that company executives had previously said it could take up to two days to tell whether it had worked.
News of progress on plugging the spill, coupled with a nearly 4 per cent rise in oil prices, lifted shares of the companies mostly closely tied to the oil spill. BP shares were up nearly 6 per cent in London trading.
Nervous investors have wiped about a quarter, or about $50 billion (€40.8 billion), off the energy giant's market value since April.
US geological survey Director Marcia McNutt said various government teams examining the oil spill estimated the flow ranges from 12,000 barrels (1.9 million litres) to 25,000 barrels (3.97 million litres) per day.
Mr McNutt heads a panel of experts set up by the government to determine the flow rate. BP, which had previously estimated the spill rate since the well blew out in April at 5,000 barrels a day, declined immediate comment on the government's estimate.
In the previous worst US oil spill, in March 1989, the tanker Exxon Valdez hit an undersea reef in Prince William Sound, Alaska, spilling nearly 260,000 barrels (41.34 million litres) of oil into the sea.
Interior Secretary Ken Salazar said the head of the Minerals Management Service federal agency, Liz Birnbaum, had resigned. Many US lawmakers and environmental groups had blamed the agency for lax regulation of offshore drilling rigs and production platforms.
Reuters