BP shares soar as spill spreads

Tue Jul 6, 2010 7:58pm EDT
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By Kristen Hays and Leah Schnurr

HOUSTON/NEW YORK (Reuters) - Drilling of a relief well to halt the BP oil spill in the Gulf of Mexico is a week ahead of schedule, the U.S. official overseeing the response to the disaster said on Tuesday.

The prospect of an earlier completion of the well, seen as the most promising way to plug the oil leaking from BP's blown-out undersea well, could help bolster the energy giant's battered shares, which rose about 9 percent in New York trade.

But Retired Coast Guard Admiral Thad Allen told reporters in Houston that crews were still aiming to finish drilling two relief wells in mid-August, and he shot down speculation that the first of the two wells could plug the leak in July.

BP shares continued a recent rally after the British energy giant said it could cover the costs of the spill without selling new shares, despite reports it was talking to government-owned funds in the Middle East about buying a stake to ward off takeover attempts.

"Any positive news as far as expediting what they've been trying for a long time now will be a further catalyst for buyers to get in," said Alan Lancz, president at Alan B. Lancz & Associates Inc in Toledo, Ohio.

"... anything that would speed up the process or any kind of success at all as far as capping it would be a welcome relief. Then you can get down to a definitive range of liability. While it's spilling, it's very difficult to ascertain what the total costs will be," he said.

Allen, who spoke minutes after markets had closed in New York, also said a third vessel at the leak site that will nearly double BP's oil-capture capacity to 53,000 barrels a day from around 25,000 now was partially hooked up on Tuesday, but rough seas hampered efforts to finish the job.

Estimates of the leak's severity vary widely and run as high as a 100,000 barrels per day.   Continued...

<p>Oil clean-up crew bags up oiled sand along the Grand Isle beach front, Louisiana, July 5, 2010. REUTERS/Sean Gardner</p>