WRAPUP 6-BP to test new cap to stem oil flow, US shares recover

* New well cap could at last cut off oil flow

* Testing expected to start Tuesday, to take 6-48 hours

* BP says talks going well on $10 bln divestment program

* BP shares recover after profit-taking in New York
(Updates stock prices, new BP quotes)

By Kristen Hays

HOUSTON, July 13 (BestGrowthStock) – BP Plc (BP.L: )(BP.N: ) prepared
on Tuesday to test a new cap on its runaway well in an effort
to finally arrest the flow of oil gushing into the Gulf of
Mexico for the last 12 weeks.

The tests, due to last between six and 48 hours, will begin
later on Tuesday on BP’s newly installed “capping stack”, which
has a better seal than the last cap placed on the well and aims
to stop oil from spewing out of the failed blowout preventer.
[ID:nN13238464] [ID:nN13237328]

A critical test to gauge the integrity of the blown-out
well is is expected to start “in a couple of hours,” a BP
executive said at about 3:30 p.m. EDT (1930 GMT).

Regardless of the test results, BP should be able to
contain the ruptured well’s flow with oil-siphoning vessels by
mid-July, said retired Coast Guard Admiral Thad Allen, the top
U.S. official overseeing the oil spill. [ID:nN13249161]

As the oil giant prepared for a potential turning point in
the worst offshore spill in U.S. history, it also said its
plans to sell some non-core assets, which will help pay for a
$20 billion clean-up fund, were moving forward.

Both pieces of news had helped BP shares maintain their
recent recovery in London, although they seesawed in New York
with profit-taking erasing most of the early gains.

“We are in discussions with a number of companies about a
number of assets,” BP spokeswoman Sheila Williams said in
London, declining to give details. “Talks are going well.”
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Special Report: Should BP nuke well? [ID:nLDE6610K6]
Insider TV http://link.reuters.com/qyk76m
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In Dubai, Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed
al-Nahayan said the emirate was considering investing in BP.

“We are still thinking about it,” Bloomberg quoted him as
saying when asked about buying a stake in the firm.

BP Chief Executive Tony Hayward visited Abu Dhabi last week
and met with the sovereign wealth fund, the Abu Dhabi
Investment Authority (ADIA). [ID:nLDE6660AC]

BP divested a small non-core downstream asset on Tuesday,
selling Magellan Midstream Partners L.P. (MMP.N: ) its crude oil
storage tanks in Cushing, Oklahoma and related petroleum
pipelines for $289 million. [ID:nSGE66C0GB]

Williams said the sale, in the works since February, is not
part of BP’s plan to unload $10 billion in non-core upstream
assets to help pay for the cost of the Macondo cleanup.

The recent focus on divestments highlighted just how much
a pounding BP shares have taken, since the firm’s net asset
value is around $80 billion more than its market value, said
analyst Jason Kenney at ING in Edinburgh.

About seven non-core assets — including ones in Alaska,
Colombia, Venezuela and Vietnam — could be worth $45-50
billion, he said. [ID:nN12148109]

In London BP shares ended up about 2.9 percent. But in New
York, profit-taking set in around midday. The shares closed up
marginally at $36.88.

“Let’s not forget the stock was $28 six or seven days ago,”
said Robert Lutts, chief investment officer at Cabot Money
Management in Salem, Mass. “It was overbought shorter term
relative to the potentially improving fundamental situation.”

The U.S. shares have advanced around 36 percent since the
stock collapsed to a low at the end of June.

NO MORE OIL FLOWING?

BP’s leaking wellhead is a mile (1.6 km) underwater. The
new 160,000-pound (73-tonne) capping stack was custom-designed
and built for the leaking well.

Even if the new cap fails, BP will have the ability to
siphon up to 80,0000 barrels per day of oil from the blown-out
well by mid-July and either burn it or store it aboard vessels
on the surface, Allen said.

“Either through a potential shut-in of the well or being
able to produce most if not all of the flow that is generated,
either way, we will have a way to contain the oil,” he said.

Kent Wells, senior vice president of exploration and
production, said BP and government scientists would monitor the
cap during the tests at “very minute intervals.”

If tests progress as hoped, BP said no oil would flow from
the well for the first time since a rig being drilled for BP by
Transocean Ltd (RIG.N: )(RIGN.VX: ) sank days after an explosion on
April 20 that killed 11 workers.

During the tests, two smaller siphoning systems, including
the one brought online on Monday, will be turned off. But BP
warned the outcome was uncertain since the system has never
been tested at such depths.

Depending on the results, BP will either keep the cap
closed entirely or use it to resume siphoning oil to ships on
the surface. If it works effectively, the cap should either
hold all the oil in or allow it to be safely captured and
funneled away.

While the cap could contain the flow, Wells said relief
wells remain the sole means to kill the leak permanently. The
first of those wells has another 30 feet (9 metres) to drill
before inserting pipe and preparing to intercept the blown-out
well by the end of July, Wells said.
(Additional reporting by Ayesha Rascoe and Alexandria Sage in
New Orleans, Matthew Lynley in New York and Eric Onstad in
London; Writing by Deborah Charles; Editing by Simon Denyer and
Jerry Norton)

WRAPUP 6-BP to test new cap to stem oil flow, US shares recover