British energy giant BP Plc's stock price fell today as it faced more US government and congressional scrutiny over its handling of the Gulf of Mexico oil spill, the worst in US history.
US interior secretary Ken Salazar told a Senate hearing he would ask BP to repay the salaries of any workers laid off due to the six-month moratorium on deepwater exploratory drilling imposed by the US government after the spill.
Mr Salazar said he would consider lifting the moratorium early if he received recommendations from a presidential commission investigating the spill sooner than expected.
The spill began on April 20th after an offshore oil rig explosion that killed 11 workers and ruptured the deep-sea well. It has caused environmental devastation along the US Gulf Coast and threatens lucrative fishing and tourist industries. The spill also has presented a stern test of president Barack Obama's leadership.
Coast Guard Admiral Thad Allen, who is leading the government relief effort, told reporters that BP planned to move another rig to the spill site on June 14th. This would enable the company to boost its capacity to collect oil from the well to 28,000 barrels (1.18 million gallons/4.45 million litres) a day, he said.
Admiral Allen did not indicate this meant the flow rate of the oil could be as high as 28,000 barrels a day, but his comments are likely to underscore that neither BP nor the government have yet managed to determine just how much oil is gushing out.
Government scientists have estimated that the leak spews 12,000-19,000 barrels a day, with one estimate as high as 25,000 barrels. They are due to present revised estimates later this week or early next week.
"I'm not going to declare victory or anything until I have hard numbers," Admiral Allen said.
BP shares fell around 4 per cent in London, following a 5 per cent drop yesterday, on worries that the company will have to suspend its dividend payment under pressure from US politicians who say it should go toward paying for legal claims and environmental damage in the Gulf.
In Washington, lawmakers and the Obama administration, which faces growing voter discontent over its handling of the crisis, kept up the pressure on BP and other oil companies.
BP America President Lamar McKay, along with top executives from Exxon Mobil Corp, Chevron Corp, ConocoPhillips and Shell Oil Co, were called to testify at a June 15 congressional hearing that will look at the oil spill and America's energy future.
BP's latest containment effort, which follows a series of earlier failed attempts, involved placing a containment cap with a seal on a deep-sea pipe from which the oil is gushing.
The captured oil is being channelled to a containment vessel on the surface above, where it is stored for later processing at a refinery ashore. Allen said the vessel was nearly full and was offloading its oil to a tanker.
The containment cap system is BP's most successful effort so far to deal with the leak, but large amounts of oil continue to spew into the ocean. Government scientists had warned that the latest effort could increase the amount of oil flowing from the well by up to 20 per cent.
Mr Salazar offered a lower figure at Wednesday's Senate hearing. "The rate of increase may have been somewhere between 4 and 5 percent over what it was before," he said.
The spill has already fouled wildlife refuges in Louisiana and barrier islands in Mississippi and Alabama. It also has sent tar balls ashore on beaches in Florida.
One-third of the Gulf's federal waters remains closed to fishing and the toll of dead and injured birds and marine animals is climbing.
In a further sign of the Obama administration's pressure on BP, Admiral Allen demanded that London-based BP provide more information and transparency on how it was meeting damages claims by individuals and businesses affected by the spill.
BP has paid out close to $50 million in damages claims so far along the Gulf Coast -- mostly to fishermen, shrimpers, oystermen and boat operators who say their livelihoods have been impacted by the spill. BP's total bill from the spill so far, including cleanup costs, has reached $1.25 billion.
Reuters