BP to begin tests on new oil spill containment cap

(Reuters)

BP will begin tests today on the new containment cap which it hopes will stop the flood of oil spewing into the Gulf of Mexico.

The oil giant successfully installed the new cap yesterday and will halt its other containment systems - effectively shutting in the gushing well - while it tests the so-called "capping stack" for up to 48 hours.

The firm said: "It is expected, although cannot be assured, that no oil will be released to the ocean for the duration of the test."

The new cap - which will be able to collect more than 50,000 barrels of oil a day - offers hopes of containing the spill for the first time since BP's Deepwater Horizon rig exploded in April, killing 11 workers.

Shares in BP have been hammered by the disaster but rose 9% yesterday amid speculation of a takeover by US rival ExxonMobil and hopes of progress on tackling the crisis.

But the firm also stressed that the relief wells currently being drilled miles beneath the seabed of the Gulf of Mexico were the only means of permanently sealing and isolating the damaged well.

BP has said the cost of the spill and the clean-up operation has reached 3.5 billion US dollars (£2.3 billion) so far. The company has 46,000 staff and 6,400 ships involved in the efforts.

A clearer picture of the financial impact of the spill on BP will be shown when it publishes its results for the second quarter of 2010 on July 27.

BP is a staple of UK pension funds but is passing its dividend for the first time since the Second World War, although it insists it is financially strong enough to tackle the spill.

The group has paid out about 165 million dollars (£110 million) in claims to 52,000 businesses so far, although the intense political pressure on the oil giant has eased since the group set aside a 20 billion dollar (£13.2 billion) compensation fund to meet the costs of the disaster in June.

Chief executive Tony Hayward - who caused a storm with a series of PR blunders - has stepped down from the day-to-day running of the clean-up, handing over to board member and American citizen Bob Dudley.