WRAPUP 2-BP starts work to install new cap on gushing well

* BP removes cap, starts switch process

* Installing new cap could take 4-7 days, company says

* BP doing final tests on new rig to collect more oil

* Modified U.S. drilling moratorium plan seen within days
(Adds details in paragraphs 7-10)

By Kristen Hays and Alexandria Sage

HOUSTON/PORT SULPHUR, La., July 10 (BestGrowthStock) – BP Plc
(BP.L: ) (BP.N: ) removed a containment cap from its stricken Gulf
of Mexico oil well on Saturday in the first step toward
installing a bigger cap to contain all the crude gushing into
the sea and fouling the coast.

The maneuver released a torrent of oil that will spew
unrestrained into the Gulf for four to seven days — the time
BP says it will take to put in place a bigger cap and seal.
Officials say the new cap would capture all the oil leaking
from the well and funnel it 1 mile (1.6 km) upward to vessels
on the water’s surface.

The new solution, 82 days into the worst oil spill in U.S.
history, would not allow crude to billow out the bottom and the
top, as the current cap does, said Kent Wells, senior vice
president of exploration and production for BP.

“The difference is one completely seals and the other
didn’t,” Wells said.

Retired Coast Guard Admiral Thad Allen, who is overseeing
the U.S. response to the spill, had said the cap switch could
be finished by late Sunday or Monday. BP’s plan, which Allen
approved late Friday, showed a four- to seven-day process.

Wells said the longer stretch allows for unexpected
problems. BP has another cap ready to install if the new,
bolted-on cap and seal does not work, he said.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For full spill coverage http://link.reuters.com/hed87k BREAKINGVIEWS-BP should focus on governance [ID:nLDE6640I8] Special Report: Should BP nuke well? [ID:nLDE6610K6] Insider TV http://link.reuters.com/qyk76m Graphics http://link.reuters.com/fuc76m ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

A Reuters witness who was viewing the Discoverer Enterprise
drillship on Saturday afternoon from the Transocean Development
Driller 2, a rig that is drilling one of two relief wells, said
the Enterprise was not flaring natural gas and looked quiet.

He said he did not see torrents of oil gushing up.

A live video feed on BP’s website showed the removed cap
hanging from a line used to lift it from the leak. A different
feed showed an underwater robot starting the next phase of the
switch.

Wells said BP was doing final hookups and tests of an
additional rig that can collect up to 25,000 barrels a day in
hopes that it could begin operating on Sunday. [ID:nN10130894]

The procedures are part of BP’s effort to upgrade its
oil-capture system with four vessels that can handle up to
80,000 barrels of oil a day and disconnect and move quickly if
a hurricane approaches.

A team of U.S. scientists estimate up to 60,000 barrels of
oil are leaking each day into the sea, including the oil that
BP’s systems collect and burn off.

GOOD NEWS AT LAST?

The prospect of finally stopping the flow of oil was
potentially good news for coastal residents who have been
watching the sticky black crude soil beaches in every one of
the five U.S. states bordering the Gulf of Mexico. The spill
has killed birds, sea turtles and dolphins and cut into
multibillion-dollar fishing, tourist and drilling industries,
at a time of high U.S. unemployment.

But in the flat, green stretch of southeastern Louisiana
where cattle graze and Gulf oil derricks dot the horizon, some
residents said they had not heard about the new cap.

They had heard about the Obama administration’s ban on new
drilling, an important employer in the area, and opposed it.

“Just because you have this tragic incident, you can’t
stop. That’s a lot of people without jobs,” said Leah Fannin,
32, who was helping a group of truckers, including her husband,
load cattle onto trailers.

Fannin’s cousin, Stephen Ray Curtis, was one of the 11 men
killed in the April 20 explosion on the Deepwater Horizon rig
that started the spill. A memorial service was planned for him
on Sunday.

The spill has taken its place firmly atop President Barack
Obama’s domestic agenda, and complicated the U.S. relationship
with close ally Britain, while subjecting Obama to fierce
criticism that his handling of the disaster has been too slow
and too easy on the British oil giant as he seeks to pass major
legislation like financial regulatory reform and an energy
bill. [ID:nN09108137]

Making the case that it is on top of the problem,
Washington pressed BP to take advantage of an upcoming window
of good weather in the Gulf to attempt to install the new cap.

The administration also went to court to defend the
six-month moratorium on deepwater drilling in the Gulf it
imposed to allow time for an investigation of the explosion
that triggered the spill.

A federal appeals court panel on Thursday declined its
request to reinstate the ban after a lower court had ordered it
lifted. Drilling companies had argued that the moratorium was
too broad and would unfairly cripple their industry, at a cost
of many jobs.

Government officials said on Friday they would announce a
new, modified deepwater oil drilling moratorium within the next
several days. [ID:nWNA5258]

Mostly, the people living with the effects of the spill
said they had no idea what to expect in the weeks and months to
come, even if the new containment cap works.

Freddy Danos, who normally runs a sport fishing boat out of
Venice, Louisiana, but now is using his vessel to help wildlife
affected by the spill, said he hoped the cap would work.

“We don’t know what the future’s going to bring — even
after they get it contained,” he said.

“We just don’t know.”
(Additional reporting by Jeff Mason; writing by Patricia
Zengerle; editing by Mohammad Zargham)

WRAPUP 2-BP starts work to install new cap on gushing well