US Gulf Coast residents battle to clean up oil spill

Residents of the US Gulf Coast battled to save their beaches on Saturday as oil washed ashore at Florida's Panama City, the latest casualty of BP Plc's ruptured deep-sea well.

The spill in the Gulf of Mexico is the largest in US history, and the White House criticised BP CEO Tony Hayward for taking time off from dealing with its consequences to watch a yacht race on Saturday off the south coast of Britain.

To try to minimise the leak's environmental impact, the British energy giant is containing some of the oil as it gushes from a well on the floor of the Gulf of Mexico.

It restarted its effort to siphon oil spewing from the well after one system was shut down for 10 hours to fix a problem with its fire-prevention equipment and to let a storm pass.

The system has been "building up to stable rates since" it was restarted, BP said in a statement. A second system is also running, though oil continues to escape into the sea. 

Word of the latest problem in controlling the leak came after Anadarko Petroleum Corp, part owner of the well, accused BP of "reckless" conduct leading up to the accident. 

Sixty-one days after a BP offshore oil rig exploded and sank in the Gulf of Mexico, the encroaching oil spill is  threatening the coastal economies of four US states including Louisiana, whose fragile wetlands have been hardest hit.

In Florida, the Bay County Emergency Operations Center confirmed that tar balls had washed onto the beach at Panama City, a popular tourist destination.

Crews cleaned them up and beaches remained open but the city is the most easterly point in Florida the oil has touched, so it raises a red flag for state tourism.

"Late last night, some nickle to fifty-cent sized tar balls washed ashore on the west end of Panama City Beach," Bay County Public Information Officer Valerie Lovett said. "The vast majority (of tar balls) disappeared with the tide."

Hayward was conspicuously absent from a gathering of global oil industry leaders on Saturday in St Petersburg, Russia, where his company's woes were a constant topic of discussion.

In fact, he was spending time with his teenage son watching a yacht race around the Isle of Wight, off the south coast of Britain, after almost two months away from home and family, according to BP spokeswoman Sheila Williams.

His presence there drew a rebuke from White House chief of staff Rahm Emanuel, just the latest occasion the Obama administration has singled out Hayward for criticism. 

"I think we can all conclude that Tony Hayward is not going to have a second career in PR consulting. This has just been part of a long line of PR gaffes and mistakes," Emanuel told ABC News' 'This Week'. 

Earlier this month, Obama said he would fire Hayward if it were his decision because of his performance over the spill.

Anadarko, owner of a quarter of the ruptured well, has pinned the blame and financial responsibility for the spill squarely on BP.

"There appears to be gross negligence or willful misconduct," Houston-based Anadarko chairman and CEO Jim Hackett said in an interview that helped to drive his company's shares up 2.2% in after-hours trading on hopes it could avoid multibillion-dollar liabilities.

BP said it "strongly disagrees" with the accusation of gross negligence but would keep focusing on the oil spill and is working with federal, state and local authorities to try to protect the coastline.

So far, Louisiana's wetlands and its fishing industry have been hardest hit by the spill and fishing communities say their way of life faces more threat now than it did after Hurricane Katrina damaged much of the Gulf Coast in 2005.

Leroy Jones, a sixth-generation oysterman in the south Louisiana fishing port of Buras, said he worries his way of life could be lost as marshes that feed the oyster beds are contaminated.

"It's wild. .... It feels like 100 pounds of stress is added every day," he said as he painted his boat instead of fishing. On the job, he makes as much as $1,700 a day from oysters. Compensation checks from BP are a fraction of that.

The new federal administrator of a fund to pay for damages, Kenneth Feinberg, told CBS News on Friday the $20 billion fund agreed to by BP under pressure from the White House could be increased if it proves insufficient. 

BP is seeking up to $7 billion in loans from seven banks, banking sources told Reuters. The sources said BP may offer up to $10 billion in debt as early as next week.

Its debt is now trading at junk levels, and Moody's has cut its rating three notches on concerns about spill liabilities.

After falling 6.8% in a volatile week driven by Washington politics, BP's shares are down 26% so far in June, their worst month since the October 1987 market crash.

The first of a pair of relief wells meant to stop the oil flow in August is within 200 feet (61 meters) of the side of the blown well, said Kent Wells, BP's senior vice president of exploration and production. But it must be drilled farther before it can intersect with the blown well.

BP is capturing as much as 24,000 barrels (1.008 million gallons3.81 million liters) a day of crude, but Coast Guard Admiral Thad Allen said 35,000 barrels a day, and possibly as much as 60,000 barrels, are pouring from the well, which exploded on April 20 killing 11 workers.