Oil firms challenge US drilling freeze

Oil firms went to court Monday seeking to lift a six-month freeze on deepwater drilling, as BP documents revealed 100,000 barrels of crude per day may be daily into the Gulf of Mexico.

The British energy giant also said it has spent two billion dollars so far on cleaning up the spill and compensating residents and businesses facing ruin nine weeks into the nation's worst ever environmental disaster.

Some 32 US firms, whose crews and equipment have been idled since US President Barack Obama imposed a moratorium on deepwater drilling in the Gulf, were urging federal judge Martin Feldman to ease the restrictions.

"There's an ecosystem of businesses that are being harmed every day by this moratorium," Carl Rosenblum, an attorney for the oil companies, insisted in a reference to the environmental damage being inflicted on southern US shores.

But government lawyer Guillermo Montero replied that deepwater drilling was more complicated than many other industries and the government had to review and, if necessary, update its safety protocols.

"The Deepwater Horizon incident was a game-changer. It really showed the risks inherent in deepwater drilling," he told the New Orleans court hearing.

Feldman said he could rule on the case as early as Tuesday, but certainly no later than noon (1700 GMT) Wednesday.

In a deal hammered out with the White House last week, BP agreed to set up a 20-billion-dollar compensation fund over the next four years to pay for the costs stemming from the spill.

It also set aside 100 million dollars to compensate oil workers laid off by the moratorium imposed after an April 20 explosion on a BP-leased rig off Louisiana.

Kenneth Feinberg, who has been named to run the fund, said Obama told him: ``Get these claims paid. Get them paid quickly."

But the Wall Street Journal reported Monday that BP's additional sum for unemployed workers was a goodwill drop in the ocean compared with the estimated 300 million dollars being lost every month as rigs are mothballed. BP had successfully argued in the negotiations that the moratorium was a US administration policy decision, for which they were not responsible.

"You won't find many lawyers who will say when the government imposes a moratorium it's the company's obligation to help the workers impacted," a BP negotiator told the business daily.

BP had also managed to fend off White House demands to pay to restore Gulf marshes and waterways - already blighted since the 2005 Hurricane Katrina - to leave them in a better condition than before the spill.

Meanwhile, BP boss Tony Hayward was openly mocked by the White House Monday after he took part in a yacht race at the weekend, in another public relations blunder by the gaffe-prone chief executive. "If Tony Hayward wants to put a skimmer on that yacht and bring it down to the Gulf, we'd be happy to have his help," White House spokesman Bill Burton said to laughter in the White House briefing room. New Orleans, AFP