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Heat on BP to improve oil spill response

Washington, June 13, 2010

BP faced renewed US pressure on Sunday 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 operationalized 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 40,000 barrels (1.68 million gallons/6.36 million liters) a day.
   
Frustration over the handling of the spill has grown in the United States, 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 will 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 -- currently valued at about $10.5 billion 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 on Monday. But a source said a decision may not be made until after BP Chairman 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 12 percent of all dividends paid by British companies.   

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

The British prime minister 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. - Reuters




Tags: Obama | Cameron | BP oil spill |

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