BP rallies as Hayward says sorry

17th Jun 2010 13:53

Tony Hayward, BP's chief executive, will say he is deeply sorry for the Gulf of Mexico catastrophe when he faces hostile US politicians in an appearance before Congress this afternoon.A House of Representatives committee will question Hayward over the circumstances leading up to the explosion on the Deepwater Horizon rig and the subsequent, heavily criticised, attempts to stem the leak.His grilling comes just a day after BP agreed to pay $20bn into a fund to pay for the clean-up of the spill while it also cancelled its dividends for the remainder of this year.BP shares rallied strongly today on relief that the conditions attached to the fund were not more onerous. The firm has to pay in $5bn this year and $1.25bn every quarter thereafter.Hayward's testimony will again state the explosion that killed eleven workers on the Deepwater rig was an accident "caused by an unprecedented combination of failures".He will also say that BP has learned that it needs better capabilities in deep water and that the blow-out preventer that failed on the Deepwater rig is inadequate protection on its own to prevent potentially disastrous oil and gas leaks.Latest estimates suggest up to 60,000 barrels of oil are still leaking from the well every day."We continue to do more to increase our operational flexibility and collection capability," Hayward will say. "We will not rest with our containment efforts until the well is permanently killed. I know it feels like this all takes a long time but we are compressing operations that normally take months into days."He warned: "It is important to keep in mind that these techniques have never before been attempted 5,000 feet under water."BP is the largest operator in the Gulf of Mexico and still has major assets in Alaska. Analysts suggest it has little option but to co-operate with the US authorities to protect its interests there.The firm estimates more than 40bn barrels of oil and gas lie below the deepwater Gulf of Mexico, of which about 15bn barrels have been discovered. BP has more than 650 lease blocks in waters greater than 1,250 feet in the region.