BP under pressure to control oil spill

As US Federal authorities open criminal and civil investigations into the nation's worst oil spill, British Petroleum is working overtime to control the 43-day-old oil leak which has extensively contaminated the Gulf of Mexico.

The British oil major is under immense pressure to end the crisis as soon as possible. But looking at the enormity of the disaster, official sources say that it may take months to mop up the area and make it completely free from spilled oil.

Insiders say that BP is planning a containment cap.

Experts, however, say that this would temporarily increase the flow rate, which will be useful only in the long run.

It has also pressed into service specialised robots, whose jobs will be to shear away most of the damaged pipe - a fact which has been confirmed by BP Managing Director Robert Dudley.

Engineers are hopeful that situation will be under control in the coming weeks as the new cap has the capacity to do a better job.

It is being estimated that the well has spewed up to 12,000 barrels to 19,000 barrels of oil each day. The oil spill yesterday reached the borders of Mississippi for the first time after touching the shores of Louisiana and Alabama.

Meanwhile, the Obama Administration has that it would launch a criminal probe into the origins of the rig explosion that has led to the largest environmental disaster in the US history.

"If we find evidence of illegal behaviour, we will be extremely forceful in our response," Attorney General Eric H Holder Jr said in New Orleans after reviewing damage caused by the widening spill.

Holder said that he believed there was "sufficient evidence" to warrant a criminal inquiry.

Justice Department lawyers were reviewing to see whether the companies that owned and operated the Deepwater Horizon rig, which includes BP and Transocean Ltd, violated an array of federal statutes that contain criminal and civil penalties, he said.

"There are a wide range of possible violations under these statutes, and we will closely examine the actions of those involved with the spill," Holder, who did not identify the companies targeted by the inquiry by name, said.

Owing to the probe reports, the oil major's stock and that of other energy companies have tumbled fiercely.

BP plunged as much as 17 per cent and closed with its steepest drop since June 1992, wiping out almost $18 billion of market value. Its bonds traded in line with companies rated as much as five levels lower.

BP's latest attempt may temporarily increase the flow before a cap can seal the pipe. The cost of responding to the spill has risen to almost $1 billion, the oil major said in a statement.

The company has said that it would cooperate with the investigation.

President Obama at the White House pledged to bring "those responsible" for the spill to justice. He met with members of a commission which was formed to prevent such disaster.

Obama appeared with the Commission's co-chairmen, former Democratic Sen Bob Graham of Florida and William K Reilly, who headed the Environmental Protection Agency under former Republican President George H W Bush.

The US President said he was expecting a report from them in six months.

"We have an obligation to investigate what went wrong and to determine what reforms are needed so that we never have to experience a crisis like this again," Obama said.

Chief executive officer Tony Hayward's effort to stop the leak and clean up the spill is becoming more urgent as the Atlantic Basin hurricane season starts today.

Winds from the southwest could spread the spill this week to threaten the coasts of Mississippi and Alabama, the National Oceanic and Atmospheric Administration said.

The company's survival is at stake, London-based investment bank Arbuthnot Securities Ltd said on Tuesday.

The Deepwater rig explosion in April killed 11 workers and has pumped an estimated 21 million to 44 million gallons of oil into the Gulf of Mexico.

Image: Oil continues to flow as technicians attempt a repair at the site of the Deepwater Horizon oil leak in the Gulf of Mexico in this video grab taken from a BP live video feed June 1, 2010. | Photograph: Reuters