By Mary Milliken
HOUSTON (Reuters) - Under intense pressure from the Obama administration, the chief executive of BP <:BP.LO:>Plc said he would decide later on Wednesday whether to approve a tricky procedure to try to choke off a gushing oil well in the Gulf of Mexico.
Wednesday is a critical day both for the London-based energy giant and U.S. President Barack Obama.
Nervous investors, who have wiped $50 billion (34 billion pounds) off BP's market value since the start of the spill, will be watching closely to see whether the procedure will work, after a series of earlier attempts failed to plug the leak.
BP shares were up about 2 percent in London trading, with traders citing expectations of a positive announcement by the company. As of 9 a.m. CDT (1400 GMT), BP said it had not made a decision whether to proceed with the so-called "top kill" procedure.
If the effort ultimately fails, Obama's government may have no choice but to take central charge of the response to what threatens to become the worst oil spill in U.S. history. It has so far deflected calls for it to take a more direct role and said BP has legal responsibility for fixing the mess.
PLUGGING THE LEAK
In its attempt to plug the leak, BP plans to use undersea robots to inject heavy fluids into the mile- (1.6 km) deep well and then cement into the seabed well to block oil flow in the "top kill" operation. The complex manoeuvre has never been attempted at such depths.
"Later this morning I will review that with the team, and I will take a final decision as to whether or not we should proceed," BP Chief Executive Tony Hayward told the NBC "Today" show on Wednesday.
BP engineers and scientists were running a series of diagnostic tests on Wednesday to try to determine whether the procedure had a chance of success or could potentially make the leak worse.
If Hayward determines it is safe to proceed, the procedure is expected to happen on Wednesday, he said. He added it will take a day or two to determine whether the procedure worked.
BP cautioned people watching its live webcam of the oil leak that it might not be a reliable indicator of whether the top kill procedure, if it went ahead, was working.
"Throughout the diagnostic process and top kill procedure very significant changes in the appearance of the flows at the seabed will be expected. These will not provide a reliable indicator of the overall progress, or success or failure, of the top kill operation as a whole," it said on its website.
If it fails, Hayward told NBC, "The next step of our plan is to move to a containment device that will be sealed on the top of the blowout preventer. That is on the seabed, and it would be deployed within a three or four day time window if the top kill is not successful."
Florida Democratic Senator Bill Nelson said if BP fails to plug the leak on Wednesday, Obama must seize control of the effort immediately.
"If this thing is not fixed today, I think the president doesn't have any choice -- and he better go in, completely take over, perhaps with the military in charge -- not because the military can do this," Nelson said on CNN.
BP gave the top kill plan a 60 percent to 70 percent chance of halting the leak. Industry experts at a Reuters Global Energy Summit said it had a 50-50 percent chance of working, while playing down concerns of a bigger leak.
DELAYS AND FAILURES
So far, the company's attempts to plug the massive leak have been dogged by delays and failures, and government and public frustration with the company has risen. Residents of the U.S. Gulf coast region are particularly concerned about the impact of spreading oil on wildlife and area shorelines.
With no end in sight for the environmental catastrophe, analysts say the oil spill could be a major political liability for Obama ahead of November elections that are widely expected to erode his Democratic Party's control of the U.S. Congress.
Obama has told aides in recent days to "plug the damn hole" and he will head to the Louisiana Gulf coast on Friday for the second time since the April 20 rig blast that killed 11 and unleashed the oil.
BP told congressional investigators on Tuesday that pressure tests on a drill pipe hours before the deadly explosion that caused the leak showed a "fundamental mistake," a memo released by two congressmen showed.
"There were a whole series of failures here, the blowout preventer failed on three separate occasions," Hayward told CNN, adding the company was turning over the findings of its own inquiry to U.S. authorities.
But Hayward denied the failures had "anything to do" with the company trying to save costs. He called the well blowout and rig explosion an "unprecedented accident."
A new CBS News poll showed 70 percent of Americans disapprove of BP's handling of the disaster, while 45 percent give the Obama administration a negative rating despite its efforts to show it is on top of the crisis.
BP is in a race against time to save the Gulf of Mexico's unique ecosystem and lucrative fishing industry, as well as the company's reputation and its heavy presence in the United States.
The company has estimated that about 5,000 barrels (210,000 gallons/795,000 litres) have been leaking every day, although some scientists have given much higher numbers for the size of the leak -- up to 20 times more.
(Additional reporting by Kristin Hays in Houston, Pascal Fletcher in Miami and Susan Heavey in Washington; writing by Ross Colvin; editing by Will Dunham and Mohammad Zargham)
