July 29, 2010 / 11:08 PM / 9 years ago

UPDATE 1-BP denies Texas a cash advance, gets scathing response

* BP rejects Texas request for $25 mln clean up grant

* BP to pay Texas clean up costs when they arise - Letter

* State affected by tar balls, less damaged than others

* Top Texas officials criticize BP in response letter (New throughout with more details from letters, attempts to reach BP, background; adds byline.)

By Joshua Schneyer

NEW YORK, July 29 (Reuters) - Oil giant BP Plc (BP.L) rejected a request from Texas for a $25 million cash advance to clean up shorelines sullied by the Gulf oil spill, and got a scathing response from top Texas officials, according to letters given to Reuters on Thursday.

BP denied a July 5 request from Texas Attorney General Greg Abbott for a $25 million “block grant,” similar to cash advances for clean up that BP gave to all other Gulf Coast states, the letter from BP to Abbott showed.

While BP will not grant the cash advance, it promised to pay Texas for clean-up costs as they arise, and pledged $5 million for the Texas Coastal Protection Fund, which is meant for oil spill responses.

Some tar balls linked to BP’s Gulf of Mexico spill have hit Texas shores, although damage has so far been small compared to widespread fouling of beaches in other Gulf states.

The BP letter, dated July 12, was given to Reuters by Abbott’s office. In a scathing response letter, dated July 22, Texas Governor Rick Perry and Attorney General Abbott urged BP to advance more clean-up funds quickly.

“BP has taken steps to ensure every other Gulf Coast state is prepared to respond, yet you shortchange the state in which you have chosen to domicile - and whose beaches you threaten with tar balls,” reads one passage of the response letter given to Reuters.

London-based BP has its U.S. headquarters in Houston and holds billions of dollars in Texas assets.

In another passage, Governor Perry, a Republican, tells BP executive Doug Suttles that “you are essentially asking Texas to just trust you.”

BP did not immediately return phone calls or emails requesting comment on the letters.

The company said in its letter to Abbott that Texas shores may face only “the occasional random scattering of tar balls,” citing an estimate from the U.S. National Oceanic and Atmospheric Administration.

Chemical analysis of sludgy tar balls found at McFadden Beach near Port Arthur, Texas, showed the oil was from BP’s spill.

BP has paid around $4 billion so far to respond to the massive spill caused by its Gulf of Mexico oil well blowout on April 20. The company has provided “block grant” advances of $50 million to other states affected by the spill.

“BP contends that Texas’ request for financial assistance to defend its Gulf Coast is “premature” and that BP “expects” that any risk to Texas is “limited,” Perry and Abbott wrote.

“These predictions about the future are entitled to no weight, and offer no comfort to Texans impacted by the spill,” they added.

BP has received more than 100,000 oil spill claims so far. According to Perry’s letter to BP, more than 4,400 are from Texas, and BP has paid out more than $5 million to Texas claimants. (Editing by David Gregorio)

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