BP begins capturing some oil from Gulf gusher

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BP began capturing some oil spewing from a 46-day gusher on Friday after installing a containment cap atop a ruptured Gulf of Mexico well, as tar balls began washing ashore on the Florida coast.President Barack Obama was making his third trip to the stricken area since the disaster to keep pressure on BP and listen to local residents affected by the disaster.The crisis is proving to be a monumental test for Obama, who has faced criticism that he has failed to show command or emotion over an oil spill whose impact was dramatized by front-page photographs of oil-covered birds.The U.S. Coast Guard said the containment cap placed atop the gusher a mile deep (1.6 km) beneath the Gulf's surface was now collecting about 1,000 barrels a day. [nN04111508] It would take a few days for the operation to reach optimum performance, at which point the company hoped to be able to siphon off 90 percent of the leak.It was a sign of progress after several failed attempts by the energy giant. U.S. officials cautioned against being too optimistic, however, since large amounts of oil are still escaping.Oil sheen and tar balls washed ashore on a northwest Florida beach crowded with holidaymakers in what appeared to be the first impact on the state from the spill."You see shells and jellyfish and trash but I've never seen oil here. It's crazy," said Anthony Cross, while walking along Pensacola Beach with his three daughters, holding a child's fishing net full of tar.BP Plc executives held a conference call for investors but put off a decision on whether to suspend paying its next quarterly dividend as some U.S. politicians had demanded. However at least one analyst said the underlying message was that the dividend was safe.Standard & Poor's cut BP's credit rating to AA-minus from AA, following the example of two other rating agencies on Thursday.The company's share price gyrated in London and New York as company CEO Tony Hayward answered questions. He said the company had plenty of money to meet its obligations, including $5 billion in cash and additional credit lines it could tap if necessary. It has already spent well over $1 billion on its response.BP does not expect to be able to fully halt the oil flow until August, when two relief wells are to be completed.The amount of oil being captured should increase as BP closes vents to trap more oil, Coast Guard Admiral Thad Allen told reporters in a conference call.BP Chief Operating Officer Doug Suttles told U.S. networks the containment cap "should work" by capturing upward of 90 percent of the gushing oil.One thousand barrels is a small fraction of the 19,000 barrels per day that the U.S. government has estimated could be gushing from the well.The cost of credit default swaps insuring the debt of companies affected in the oil spill fell on Friday. BP's debt protection costs fell 27 basis points to 218 basis points, or $218,000 per year for five years to insure $10 million in debt, according to Markit Intraday.Pressure had been building on BP to suspend dividend payments, which total $10.5 billion a year, and divert cash to dealing with the spill and clean-up but the company's statement was inconclusive on the issue."Future decisions on the quarterly dividend will be made by the Board, as they always have been, on the basis of the circumstances at the time," the statement said.Alan Sinclair of Seymour Pierce said, "My take on the underlying message is that the dividend is safe..."Hayward vowed BP will "stand by our obligations.""We will halt this spill and put right the damage that has been done," he said.The BP CEO had to apologize after angering Gulf residents by saying last weekend that "I'd like my life back." Eleven oil platform workers died in the explosion and fire that set off the crisis on April 20.Obama is confronting one of the biggest tests of his presidency as his party girds for tough congressional elections in November. He called off a trip to Australia and Indonesia set for this month to focus on the oil spill.He was making his third visit to the Gulf. The president has faced criticism as to whether he is doing enough or showing enough emotion in dealing with the crisis.Obama told CNN's "Larry King Live" on Thursday that "venting and yelling at people" was not his role.Florida, the so-called Sunshine State with a $60 billion-a-year tourism industry, has been bracing this week for the forecasted arrival of the spilled oil, which has already hit Louisiana, Mississippi and Alabama shores to the west.Beachgoers on Pensacola Beach, many of them children, found tar blobs, some the size of ping pong balls, a Reuters TV producer reported. No cleanup crews were in sight.(Additional reporting by Chris Baltimore and Kristen Hays in Houston, Sarah Young in London and Jane Ross in Pensacola, Writing by Steve Holland; editing by Alan Elsner)
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