WRAPUP 8-BP to resume oil spill work as storm eases

* All ships should be back on site by Sunday

* “Static kill” effort to plug leak could start in 3 days

* Feinberg accuses BP of holding up compensation payments
(Adds drilling rig back in place)

By Anna Driver

HOUSTON, July 24 (BestGrowthStock) – BP Plc (BP.L: ) (BP.N: ) moved
ships and workers back to the Gulf of Mexico oil spill site as
a storm eased on Saturday, and it could begin pumping mud into
the blown-out well to try to plug the leak within three days.

As Tropical Depression Bonnie weakened in the Gulf, retired
Coast Guard Admiral Thad Allen, head of the U.S. spill
response, said the launch of a “static kill” operation to plug
the well by pumping in heavy drilling mud and possibly cement
could start in three to five days. [ID:nN24147153]

The rig drilling a relief well intended to permanently stop
the leak was back in place at the spill site, though the storm
will push back BP’s mid-August target date for completing it.
Allen said work on the relief well could be delayed seven to
nine days. [ID:nN24147153]

As much as half of the oil production in the Gulf had been
suspended on Saturday as the storm approached.

Also on Saturday, a report suggested changes in BP’s
management could be on the table for next week.

Citing unnamed sources, Sky News said BP directors were
considering Chief Executive Tony Hayward’s future and may
announce his departure Tuesday when the company reports second
quarter results. Hayward has been under pressure to resign for
perceived mishandling of BP’s early response to the spill.

A BP spokesman reiterated on Saturday that Hayward had the
full support of the board and said the company did not comment
on speculation.

Earlier this week, The Times newspaper reported Hayward
would step down within the next 10 weeks [ID:nSGE66K031]. BP
had also firmly rejected the Times story.
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For full spill coverage http://link.reuters.com/hed87k

Special report on US spill response chief [ID:nN21101035]

Breakingviews [ID:nLDE66K0J6]

Graphic on BP assets http://link.reuters.com/byn78m
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BP sealed the leak last week with a tight-fitting
containment cap, choking off the flow of oil for the first time
since an April 20 rig explosion killed 11 workers and sent
crude spewing into the Gulf, soiling coastlines in five U.S.
states and devastating tourism and fishery industries.

Allen said two ships had remained on site overnight to
monitor the cap as other ships pulled out ahead of the storm,
and the well retained its integrity.

As the storm threat eased, the independent administrator
running a $20 billion fund set up by BP to compensate people
for financial losses from the spill said the British energy
giant was holding up payments to economic victims.

“I have a concern that BP is stalling claims. Yes, BP is
stalling. I doubt they are stalling for money. It’s not that. I
just don’t think they know the answers to the questions (by
claimants),” Kenneth Feinberg told reporters in Alabama.
[ID:nN24177402]

Thousands of businesses in Gulf coast states have been
crippled by the oil spill, the worst in U.S. history. BP agreed
to set up the $20 billion fund under pressure from U.S.
President Barack Obama.

SOME BENEFICIAL EFFECT

Work on the spill had been delayed by the approach of
Tropical Depression Bonnie, but the National Hurricane Center
said the storm was unlikely to strengthen and could degenerate
into an area of low pressure later on Saturday.

Bonnie was downgraded from a tropical storm to a depression
on Friday as it weakened on its trek across Florida into the
Gulf. Bonnie could dissipate into a broad area of low pressure
if its sustained winds fall another 5 miles (8 km) per hour.

The storm was on course to make landfall between the
Louisiana coast and Florida’s northwest Panhandle late on
Saturday. The ruptured deep-sea well — a mile (1.6 km) under
the ocean surface — is located off the coast of Louisiana.

Despite causing delays, Bonnie could have some beneficial
effect, Jane Lubchenco, who heads the National Oceanic and
Atmospheric Administration, told reporters.

“We expect that Bonnie should help dissipate and weather
the oil at the surface,” Lubchenco said, adding it would help
break tar patches and tar mats into smaller tar balls.

At a town hall meeting in southern Alabama, fishermen and
other business owners told Feinberg of their frustration and
anger at what they say is a slow and complex claims process
that lacks transparency.

“After today there will be no more business as usual. I
learned today the depth of frustration in people here on the
coast,” Feinberg told the meeting.

U.S.-BRITISH RELATIONS

BP’s spill is believed to have spewed more than five
million barrels of oil into the Gulf and has complicated
relations between close allies the United States and Britain.

British Foreign Secretary William Hague said in a letter to
a U.S. lawmaker the British energy company behaved in a
“perfectly normal and legitimate” way in lobbying Britain in
2007 for a prisoner transfer agreement with Libya.

In the letter to U.S. Senator John Kerry, Hague reiterated
the British government’s position there is no evidence BP had
any connection to Scottish authorities’ release last year of
the man convicted of the 1988 bombing of a U.S. airliner over
Lockerbie, Scotland. [ID:nN23168984]

British documents show several discussions between BP and
the British government in 2007, Hague said, when a prisoner
transfer deal with Libya was being negotiated at the same time
BP was pursuing an oil exploration deal with Libya.

The U.S. Senate Foreign Relations Committee, chaired by
Kerry, has scheduled a July 29 hearing to examine whether BP’s
oil interests influenced the 2009 release of the only person
convicted in the bombing of Pan Am flight 103 over Scotland.
The bombing killed 270 people, most of them Americans.

Stock Market Analysis

(Additional reporting by Leigh Coleman and Rachelle Younglai
in Alabama, Tom Brown in Miami; Writing by John Whitesides;
editing by Todd Eastham)

WRAPUP 8-BP to resume oil spill work as storm eases