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 made his third trip to the stricken Gulf coast since the disaster to keep pressure on BP and to listen to residents affected by the worst oil spill in U.S. history.
The crisis, dramatized by front-page newspaper photographs of oil-drenched birds, is proving to be a monumental test for Obama, who has been accused of failing to show leadership or emotion as the impact of the disaster has grown.
The U.S. Coast Guard said the containment cap placed atop the gusher a mile (1.6 km) beneath the Gulf’s surface was collecting about 1,000 barrels a day.
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 leaking oil.
White House spokesman Robert Gibbs told reporters on Air Force One that the cap is taking in more hydrocarbons and fewer of the frozen, slushy hydrates that gummed up an earlier attempt to cap the gusher.
It was a sign of progress after several failed attempts by the London-based energy giant. U.S. officials cautioned against being too optimistic, however. "They were making some slow progress," Gibbs said.
"I’m long out of the prediction business on this. Everyone is hopeful that this works," he said.
Oil sheen and tar balls washed ashore on a northwest Florida beach crowded with holidaymakers in what appeared to be the spill’s first impact on the state.
"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.
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.
BIG TEST FOR OBAMA
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. 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 oil spill 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. television networks that 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 rig 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 spill, amid criticism over his handling of the crisis.
Obama told CNN’s "Larry King Live" program on Thursday that "venting and yelling at people" was not his role.
