An under-pressure British Petroleum announced Monday it was releasing prompt cash grants of 25 million dollars for US states facing costly cleanup efforts from the Gulf of Mexico oil spill.

"We have been working with each state to work out how to ensure that funds are available as they access their area contingency plans," BP Chief Operating Officer Doug Suttles told reporters.

"We've agreed with them that we'll make 25-million-dollar cash block grants available so that they can make sure that those activities can begin immediately and that they have confidence that those activities will be paid for," he added.

BP leased the Deepwater Horizon oil platform that blew up on April 20 and sank two days later, killing 11 workers.

The accident left the underwater well gushing an estimated 210,000 gallons of crude oil a day into the ocean, threatening wildlife and the livelihood of fishing communities along the US Gulf Coast in the states of Louisiana, Mississippi, Alabama and Florida. Texas too is under potential threat.

Facing a mounting public relations crisis, BP chief executive Tony Hayward has accepted claims that the British oil company was liable under US law for "legitimate" claims for costs and damages following the incident.

US federal and state governments, however, are concerned about who will foot the ultimate bill for massive costs of the cleanup operation and how soon funds for the effort will become available.

The White House Monday stressed that BP was "absolutely" responsible for the cleanup, while President Barack Obama has said he would "spare no effort" in cleaning up what he called "a massive and potentially unprecedented environmental disaster."

Senators from coastal states also fired a shot across BP's bow on Monday, unveiling legislation to lift a cap on the amount big oil firms can be forced to pay for economic damages stemming from catastrophic spills.

The proposal would raise the figure from 75 million dollars to 10 billion dollars.

earlier related report

BP planning Tuesday launch of dome to cap oil leak
New Orleans, Louisiana (AFP) May 3, 2010 –

BP said it would launch an unprecedented effort Tuesday to contain the gushing oil well in the Gulf of Mexico by shipping out a state-of-the-art dome to place over the leak.

"We expect to load out the fabricated containment chamber tomorrow and we hope to have the system up and operating within a week," British Petroleum's Chief Operating Officer Doug Suttles told reporters Monday.

The dome is designed to be placed "over the leak sources and allow us to collect the oil, funnel it up through pipework to a drill ship called Enterprise on the surface," he said.

An estimated 210,000 gallons of crude a day has been streaming from three leaks at the wellhead below the Deepwater Horizon rig that sank on April 22, threatening the US Gulf Coast with environmental catastrophe if the well cannot be capped.

BP, which leases the sunken rig, meanwhile has been racing to contain the leaks under high pressure from the White House and US lawmakers, who have repeatedly pointed out that the British oil giant is legally bound to cover the cost of the disaster and spearhead the response.

Over the next week BP will be connecting the systems to capture the oil, first with the main dome over the first leak and another two for the other leaks, and funnel it to the waiting Enterprise on the surface, Suttles said.

With rough seas over the wellhead, Suttles reassured that weather conditions were forecast to be more favorable over the weeks ahead.

The main containment chamber — "essentially a very large metal building with a dome top" — weighs some 65 tonnes, he said, and warned such an effort has never been tried before on this scale, or at this depth.

"There's a number of technical challenges…. This has been done in shallow water, it's never been done in deep water before, so we're trying to get through those final challenges to make sure that we can actually get that oil to the surface through the pipework," he said.

At a depth of around a mile (1,500 meters), conditions at the leaking wellhead are extreme for employing this level of delicate engineering — it is pitch dark and pressure at that depth is around 2,500 pounds per square inch.

"What allows this to work is the fact that oil is less dense than water and wants to float, so essentially an oil column exerts less pressure than a water column, so that helps push the oil to the surface," Suttles said.

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