* BP CEO says 'top kill' proceeding as planned
* Maneuver never before attempted at this depth
* Failure may push Obama to take charge of response
* Hopeful investors boost BP share price (Updates with command center briefing, local comment)
By Chris Baltimore and Tom Bergin
HOUSTON, May 26 (Reuters) - BP Plc's chief executive said a difficult deep-sea operation to plug a gushing oil well was proceeding as planned on Wednesday and the next 24 hours will determine the energy giant's success in stanching the leak deep on the Gulf of Mexico floor.
BP remained cautious about the outcome of the much anticipated "top kill" procedure, as did President Barack Obama, whose credibility stands to suffer if one of the country's worst environmental catastrophes does not end soon.
But the fact that the London-based energy giant was able to launch the complex maneuver around midday and keep it on track in the first hours was a welcome respite from a string of failures and setbacks in the 37 days since a rig blast triggered the disaster.
Undersea robots were helping to inject heavy fluids and ultimately cement pumped down about a mile (1.6 km) to the sea-bed well, while BP chief executive Tony Hayward and U.S. Energy Secretary Steven Chu monitored operations together in Houston. [nN26217187]
"The operation is proceeding as we planned it," Hayward said in a media briefing four hours after launching the top kill strategy. [nWLA5010]
"It will be another 24 hours before we know whether or not this has been successful," he added.
TAKE A LOOK on the spill [ID:nSPILL]
INSIDER TV: link.reuters.com/wuw64k
The embattled CEO stood by BP's 60-70 percent odds of success. But top kill, a routine procedure on the surface, has never been attempted at such depths, prompting one industry expert to predict less favorable odds.
"You have got some of the smartest guys in the business trying to figure this out, but it has never been done before," David Pursell, partner at Houston investment bank Tudor, Pickering, Holt & Co, told Reuters Insider.
"I think the odds have to be 50 percent or less," he added.
Obama said that if successful, BP's plan to cap the well should greatly reduce or eliminate the flow of hundreds of thousands of gallons (liters) of crude billowing into the Gulf. [nN26213830]
If it fails, "there are other approaches that may be viable," he said on a trip to California.
Obama, who has told aides to "plug the damn hole," will head to Louisiana on Friday for the second time since the April 20 rig blast that killed 11 and unleashed the oil.
If the top kill fails, the next approach would be to install a containment device over the broken blowout preventer, a structure at the top of the well on the ocean floor, said BP chief operating officer Doug Suttles said at a briefing with the Coast Guard Wednesday.
It is still unclear how much oil is flowing from the well, but it is already shaping up to be the worst oil spill in U.S. history and a long-term threat to a rich ecosystem.
The disaster is also reshaping the U.S. oil industry. Obama is expected to announce on Thursday that he will continue to hold off issuing deep water drilling permits off the Gulf of Mexico, but allow permits to be issued for shallow water drilling, a government source told Reuters. [nN26215306]
The oil's destruction of critical habitats continued to spread, with Louisiana Governor Bobby Jindal saying that more than 100 miles (160 km) of the state's 400-mile (644 km) coastline were now affected. [nN26221290]
PIVOTAL DAYS FOR OBAMA, BP
These days may be critical for BP and Obama.
BP's reputation and its big presence in the United States is at stake and investors, who have wiped $50 billion off BP's market value since the start of the spill, will watch closely to see whether the latest attempt to seal the well works.
BP shares seesawed in London trading on Wednesday, with investors boosting the share price about 2.6 percent at one point before it closed up 1.4 percent. BP's announcement that it had launched top kill came after London markets had closed.
If the effort fails, Obama may have no choice but to take charge of the response. He has so far deflected calls for the government to take a more direct role and said BP has legal responsibility for fixing the mess.
What he can do is unclear because the government does not have its own deepwater tools and technology and will have to rely on BP.
But even with Obama applying constant pressure on the company, polls show that nearly half of Americans are unhappy with how he has handled it. That sentiment could play into the November elections that are widely expected to erode his Democratic Party's control of the U.S. Congress.
Florida Democratic Senator Bill Nelson said if BP failed to plug the leak this week, Obama must seize personal control of the effort immediately.
"If this thing doesn't work then the president ought to turn this over to the military. It has the command structure to bring in all the civilian agencies," said Nelson.
LOST COASTLINE EXASPERATES LOCALS
BP has estimated that about 5,000 barrels (210,000 gallons/795,000 liters) have been leaking every day, although some scientists have given much higher numbers for the size of the leak -- up to 20 times more.
Residents of the Gulf region are particularly concerned about the impact of spreading oil on wildlife and area shorelines, home to a $6.5 billion seafood industry and lucrative fishing tourism.
Operation "top kill" was not putting them at ease.
"If I was a betting man I'd say the odds are better than last time, but I still don't think it is going to happen," a fishing guide who goes by the name of Captain Boola said at a marina at Venice, Louisiana.
He said he only fished with clients three days this month and had cancellations through to November.
Billy Nungesser, president of Plaquemines Parish, one of the worst affected Louisiana coastal districts so far, sharply criticized BP and the Coast Guard, saying they had no comprehensive plan to defend the coast from the oil.
"We will lose more coastline from this catastrophe than from all four hurricanes -- Katrina, Rita, Gustav and Ike," said Nungesser.
(Additional reporting by Kristin Hays in Houston, Ed Stoddard in Venice, Louisiana, Pascal Fletcher in Miami, Susan Heavey and Tom Doggett in Washington, Jeff Mason in Fremont, California; writing by Mary Milliken; editing by Philip Barbara) (For multimedia coverage, please click here))