BP Plc prepared on Tuesday to try sealing off its runaway well with a new cap that it says could for the first time in 12 weeks finally arrest the flow of oil spewing from the floor of the Gulf of Mexico.
The British energy giant has suffered numerous setbacks in its struggle to control the 85-day-old gusher that stands as the worst offshore oil spill in U.S. history. And BP cautioned that tests of its latest containment system were not sure to succeed.
But BP shares, battered for weeks as damage to the U.S. Gulf Coast economy and cleanup costs mounted, surged nearly 8 percent in New York on Monday by promising developments at sea and by news that U.S. energy company Apache Corp and other bidders were in talks to buy up to $10 billion worth of BP assets.
The potential breakthrough in efforts to fully contain BP's ruptured wellhead also came as the Obama administration issued a revised moratorium on deep-water oil drilling that critics called a mere repackaging of an earlier ban struck down by the courts.
The prospect of legal battles over the administration's bid to suspend deep-sea energy exploration in the Gulf already has had a chilling effect on drilling, putting tens of thousands of jobs at risk, industry officials and analysts said.
The drilling moratorium and its toll on the oil and gas industry were expected to highlight the agenda on Tuesday for a second day of hearings by President Barack Obama's independent oil spill commission, meeting in New Orleans.
Even as the seven-member panel began its investigation into the cause and effects of the spill, BP reported a potential turning point in the crisis.
Hours after starting up a new oil-siphoning system, BP said Monday night it had installed a 40-ton containment cap atop its leaking wellhead a mile (1.6 km) underwater -- a device larger and tighter-fitting than the one it removed on Friday.
Crude oil continued to pour into the sea for the time being, but BP said it planned to begin testing the new cap, and the internal pressure of the well, on Tuesday by closing off valves on the device to constrict the flow of oil.
Possible turning point
If the test goes as intended, it would mark the first time that the flow of oil from the crippled well has been halted, at least temporarily, since the April 20 explosion and blowout of the Deepwater Horizon drilling rig that killed 11 crewmen.
The test was expected to last six to 48 hours, during which time two smaller siphoning systems, including the one brought online on Monday, will be turned off. But BP warned the outcome was uncertain.
"The sealing cap system never before has been deployed at these depths or under these conditions, and its efficiency and ability to contain the oil and gas cannot be assured," it said in a statement.
Depending on test results, BP will either keep the cap closed entirely or use it to resume siphoning oil to ships on the surface. If it works effectively, the cap should either hold all the oil in or allow it to be safely captured and funneled away.
BP said it plans to permanently block the oil flow in August with a relief well being drilled deep beneath the seabed that will intercept the original well and plug it.
In Washington, Interior Secretary Ken Salazar unveiled the administration's new deep-water oil exploration moratorium in a plan worded differently from an earlier drilling ban struck down by a U.S. appeals court last week.
The new ban would run until Nov. 30 and applies to the same oil and gas rigs as before, though it is defined by the types of drilling technologies used rather than the depth of the offshore operations, as the original plan was.
Obama is under pressure to make offshore drilling safer and hold BP accountable as the spill devastates the multibillion-dollar tourism and fishing industries across all five states along the Gulf of Mexico.
The oil industry reacted to the new drilling ban by saying it would make matters worse.
Analysts said the oil industry was likely to contest the new ban in court, but White House spokesman Robert Gibbs said the administration was confident the new moratorium would withstand legal challenges.