AT A GLANCE: Fitch Downgrades BP; Lawmakers Slam Safety Record

15th Jun 2010 13:24

LONDON (Dow Jones)--Oil continues to flow into the Gulf of Mexico from BP PLC's (BP) Macondo well, affecting hundreds of miles of coastal beaches and marshes in Louisiana, Mississippi, Alabama and Florida. The spill was triggered by an explosion on April 20 that destroyed the Transocean Ltd. (RIG) drilling platform Deepwater Horizon, killing 11 crew members. BP has been scrambling to cap the well and contain the spill since. CONTAINMENT: BP outlined new plans to the U.S. Coast Guard Sunday that will allow it to capture 40,000 to 50,000 barrels of oil a day in the Gulf of Mexico--the entire leak by current official estimates--by the end of June. The company said it will achieve this by deploying up to three additional vessels and connecting them to valves on the blowout preventer, which sits atop the well head. However, it acknowledged numerous challenges to its plan and offered no guarantee of success. In the even of a hurricane, containment operations would have to be completely suspended. COST AND CONSEQUENCES: Senate Democrats demanded Monday that BP put $20 billion into an escrow account to cover future cleanup costs and compensation payments. The White House has also called for an escrow account free from the control of BP to be established, but has yet to name a specific amount. These demands contributed to a fall in BP shares Monday of more than 9%. The call for up front compensation payment coupled with the larger size-estimate for the spill, prompted Fitch to make a severe six-notch downgrade to BP's credit rating to BBB Tuesday. The market shrugged off this announcement and BP shares held steady close to Monday's closing price. The House Energy and Commerce Committee accused BP Monday of making a series of cost-conscious decisions that ran counter to the advice of key contractors in the days leading up to the April 20 Deepwater Horizon rig explosion. "Time after time, it appears that BP made decisions that increased the risk of a blowout to save the company time or expense," Reps. Henry Waxman (D., Calif.) and Bart Stupak (D., Mich.) wrote to BP Chief Executive Tony Hayward. CLEANUP: Almost 475,000 barrels of oily liquid has been skimmed from the water's surface in the Gulf of Mexico, BP said Monday. The total length of containment boom deployed as part of efforts to prevent oil from reaching the coast is now around 470 miles and almost 600 miles of sorbent boom also has been deployed. WHAT'S NEXT: BP America chief Lamar McKay will join four executives from other oil companies at a hearing on Tuesday before a House Energy and Commerce subcommittee. BP Chairman Carl-Henric Svanberg and other company executives will meet President Obama at the White House Wednesday. BP Chief Executive Tony Hayward is scheduled to appear Thursday before the House Energy and Commerce subcommittee on oversight and investigations. This testimony will be Hayward's first since appearance before lawmakers since the April 20 explosion of the Gulf drilling rig and is likely to be a highly charged affair. -By James Herron, Dow Jones Newswires; +44 (0)20 7842 9317; [email protected] (END) Dow Jones Newswires June 15, 2010 08:24 ET (12:24 GMT)