Cautious optimism as BP cap seals leaking Gulf of Mexico oil well

A cap sealed over a leaking Gulf of Mexico well was holding back gushing crude for a second day yesterday, amid hopes BP may have nearly staunched the worst oil spill in US history.

The cap, sealed off on Thursday to enable tests on the well below, has stopped oil from flowing into the ocean for the first time since an April explosion on a BP-leased drilling platform just off Louisiana.

US President Barack Obama said the halt to the oil flow was "good news", but cautioned it was not a final solution to the leak which has triggered the nation's worst ever environmental disaster.

"It is important that we don't get ahead of ourselves," Mr Obama told reporters at the White House.

A permanent end to the spill is not expected before mid-August, when two relief wells should enable BP to fill the ruptured wellbore with cement, drowning the oil flowing up from a huge undersea reservoir.

But Gulf residents now hope new attention will be given to the clean-up operation, with the shorelines of five states ravaged, Gulf fishing waters closed and tourists shunning the usually popular beaches.

Estimates suggest anywhere between 35,000 and 60,000 barrels of crude have been leaking every day since the rig sank on April 22, two days after an explosion on the platform, which killed 11 workers.

The International Energy agency has calculated there are between 2.3 million and 4.5 million barrels of crude sloshing around in the sea.

The British energy giant has so far spent at least $3.5 billion dealing with the spill, and compensation claims could eventually cost 10 times that amount.

BP senior vice president Kent Wells said yesterday he was "encouraged" by the initial results of pressure tests trying to determine whether the well-bore was damaged in the April explosion.

"The current monitoring that we're doing shows no negative evidence," he told reporters as the complex operation continued 1,600 metres (one mile) on the seabed.

The well-bore stretches for several miles below the floor of the sea and any underground damage could lead to new leaks as the cap contains oil from the top of the leak, forcing it back down into the well-bore.

Wells warned the current pressure readings fell into a range that gave no immediate indication of whether there was any damage to the well-bore, saying further tests and analysis would be needed.

The tests are due to finish today, when crews plan to resume capturing and siphoning away the oil while the results are examined.

News on Thursday that BP had sealed the container cap was met with elation by Gulf Coast residents, many of whom face financial ruin as a result of the spill.

But a grim, complicated and expensive clean-up process, likely to take years, remains ahead for the region's oiled beaches and marshlands.

"It is an enormous relief to learn that the flow of oil that led to America's worst environmental disaster has finally been stemmed," said Michael Brune, executive director of the Sierra Club, an environmental group.

"We hope we can now turn more resources and attention to responding to the devastation that this oil disaster has already caused, and to making sure this sort of preventable tragedy never occurs again."

Endangered wildlife has also been increasingly threatened by huge ribbons of oil fouling the shores of five states - Texas, Louisiana, Mississippi, Alabama and Florida.

Mr Obama acknowledged there was still "an enormous amount of work to do," but called on Americans to remain positive.

"We are making steady progress and I think the American people should take some heart in the fact that we're making progress on this front."

The disaster prompted the Obama Administration to quickly issue a moratorium on deepwater drilling in the Gulf. A first order halting drilling was overturned by a Louisiana judge and met with stiff opposition from some local politicians, who said it would only worsen economic woes in the region.

But the White House issued a new moratorium this week, halting deep sea drilling through November, and has said the disaster is a reminder of the need for energy policy reform and better research into renewable energy resources.

Amid widespread anger, the British energy giant agreed to set up a $20 billion fund to compensate those affected by the spill, but it also faces fines linked to the total size of the oil spill.