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WRAPUP 8-Gulf oil slick spreads as oil execs face grilling

* Companies to play blame game at congressional hearings

* Desperate race against time to avert disaster

* Incident could be worst U.S. spill in history

ROBERT, La., May 10 (Reuters) - As a massive oil slick threatened Louisiana's shores, top executives from BP Plc BP.L and two other companies involved in the unfolding disaster were girding for their Tuesday grilling by lawmakers.

BP planned to try again to contain the oil surging deep from the Gulf of Mexico, this time with a far smaller but hopefully more effective funnel than it tried previously.

Delays in containing the leaking well increase the chances it could become the worst U.S. oil spill ever, surpassing the 1989 Exxon Valdez disaster in Alaska.

There are fears of a prolonged ecological and economic catastrophe after BP’s last failed attempt to stem the flow. The oil giant contracted the Deepwater Horizon drilling rig that exploded on April 20, killing 11 people and triggering the gush of oil.


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The stakes could hardly be higher and the political fallout is just beginning. It has forced President Barack Obama to rethink plans to open more U.S. waters to drilling.

Obama also wants his administration to send legislation to Congress to toughen U.S. law on caps for damages from oil spills, the White House said on Monday.

A House of Representatives bill similar to legislation introduced in the U.S. Senate would raise the maximum amount of money BP could be required to dole out for economic losses caused by the spill to $10 billion from $75 million.

BP’s stock has fallen by around 15 percent since the rig blast, wiping around $30 billion from its market value.

And frustration is mounting in Gulf communities with shrimp, oyster and other fisheries threatened and a body blow landing on the region’s vital tourist industry.

“It makes me so sad. You take so many things for granted: a beautiful beach, fresh shrimp whenever you want it. It is so frustrating because there seems to be no answers for it,” said Joyce Carroll, a resident of Alabama’s Dauphin Island.

Tourism operators there said vacation traffic had already slowed to a trickle because of fears of the spill’s impact.

There were no confirmed reports that the slick had made a major landfall as of Monday night but the National Oceanic and Atmospheric Administration said winds could push oil ashore in the Mississippi Delta, Breton Sound, the Chandeleur Islands and areas directly north.

Nesting birds and other wildlife are at grave risk.


With cleanup efforts and preparations in high gear, a blame game was set to unfold in Washington on Tuesday as executives from BP, Transocean Ltd RIGN.S and Halliburton Co HAL.Nappear before Senate panels probing the disaster. [ID:nN10225044]

Lamar McKay, president of BP America Inc; Steven Newman, president of Transocean; and Tim Probert, a senior executive at Halliburton, will face intense questioning before two Senate committees about the causes of the leak that began after the rig sank on April 22.

Based on written testimonies to the committees, the executives will blame each other’s companies.

Halliburton joins BP and Transocean because it provided a variety of services on the rig and was involved in cementing the well to stabilize its walls and plug it.

BP directs blame for the blowout at Transocean, the rig’s owner and overseer of the operation of the blowout preventer, a stack of pipes and valves designed to close off the flow of oil in case of a sudden pressure change.

Transocean says the blowout preventer was not the cause, and points to failure of two other vital elements -- the well’s metal casing and the cement that surrounded it.

For its part, Halliburton, which had the cementing contract, had finished cementing the final casing in place 20 hours before the explosion, according to testimony.

While the executives testify, the race will continue to contain the flow of the estimated 5,000 barrels (210,000 gallons/795,000 liters) of oil a day that is spewing up from the deep ocean floor into the Gulf.

BP now aims to deploy a small “top hat” dome over the leak after its effort over the weekend to cover it with a huge metal box was stymied by a buildup of crystallized gas hydrates.

The new plan is to have an oil-barrel-sized container at the leak site, a mile (1.6 km) down from the water’s surface, within 72 hours, BP Chief Executive Tony Hayward said. Then oil would be siphoned up to a tanker.

“There will be less seawater in the smaller dome and therefore less likelihood of hydrate formation,” he told reporters at the company’s U.S. headquarters in Houston.

Hydrates, a slushy mix of water and methane, clogged the top of the dome, preventing crude from being pumped.

The company is also spraying chemical dispersants at the well, an operation Hayward said was showing some success. Other options BP is weighing include trying to block the well’s failed blowout preventer with a “junk shot” of rubber or other materials, or fitting a new valve or preventer.

It is also drilling a relief well, but that could still take 75 to 80 days to complete.

Additional reporting by Anna Driver and Chris Baltimore in Houston; Pascal Fletcher in Miami; Kelli Dugan and Verna Gates in Mobile, Alabama; Steve Gorman and Verna Gates on Dauphin Island, Alabama; Tom Bergin in London; Haitham Haddadin in New York; Tom Doggett and Ayesha Rascoe in Washington; Writing by Ed Stoddard and Jeffrey Jones in Houston; Editing by Eric Walsh