By Anna Driver and Caroline Copley
VENICE, La./LONDON (Reuters) - BP <:BP.LO:>Plc's efforts to stop oil from its blown-out well gushing into the Gulf of Mexico will come under U.S. congressional scrutiny on Wednesday as the British oil company's stock price continued to fall.
BP shares fell 3.2 percent in London, following a 5 percent drop on Tuesday, on worries that the energy giant will have to suspend its dividend payment under pressure from U.S. politicians who say it should go to pay for legal claims and environmental damage in the Gulf.
The cost of protecting BP debt against default also rose sharply, with the five-year credit default swap widening 55 basis points to 315 basis points, three times higher that at the end of May, a London trader said.
The political drama in Washington and the containment drive in the Gulf were being keenly watched by investors who have seen recent loses erase a third of the company's value.
The disaster remains at the top of President Barack Obama's agenda, a point underscored by his strong comments and his plans to head back to the Gulf next week to inspect operations to grapple with the worst oil spill in U.S. history.
Obama said on Tuesday that he would have fired BP Chief Executive Tony Hayward if he worked for him because of his statements minimizing the impact of the spill.
The slick has fouled wildlife refuges in Louisiana and barrier islands in Mississippi and Alabama and also sent tar balls ashore on beaches in Florida. One-third of the Gulf's federal waters remains closed to fishing and the toll of dead and injured birds and marine animals is climbing.
In Washington on Wednesday morning, Interior Secretary Ken Salazar will testify at a Senate hearing on safety issues in off-shore oil development, a day after his department issued stronger safety requirements that companies must meet to drill in waters less than 500 feet/152 meters deep.
On the corporate front, BP shareholders would prefer to sacrifice the company's Chairman Carl-Henric Svanberg rather than CEO Hayward over the ongoing crisis, the Times reported in its Wednesday edition.
Citing an unidentified person close to the British company, the Times said shareholders had more confidence in Hayward's ability to supervise BP's response to the crisis than Svanberg, who has been largely invisible.
"The mood within the company and among shareholders is clear -- they are supportive of Tony, who they feel has done his best in a very bad situation, but they are unimpressed by Svanberg," the London newspaper reported the person as saying.
A BP spokesman dismissed the claims former Ericsson boss Svanberg, who took over the role of chairman in January, would consider stepping down.
RISING ANGER
All of this is taking place against the backdrop of rising public anger and an unfolding ecological catastrophe.
U.S. weather forecasters gave their first confirmation on Tuesday that some of the oil leaking from BP's well has lingered beneath the surface rather than rising to the top. Undersea oil depletes the water's oxygen content and threatens marine life like mussels, clams, crabs, eels and shrimp.
It was the first government confirmation of undersea oil near BP's blown-out well a mile beneath the ocean. Previously, both NOAA and BP have played down the possibility of undersea plumes.
Scientists involved in the studies will testify before a House of Representatives Energy and Commerce subcommittee panel that is probing the spill -- one of the several being held on Wednesday's busy day of hearings.
Meanwhile, BP will be striving to contain more of the oil spewing from the ocean floor.
BP said on Tuesday it had collected 14,800 barrels of oil from the leaking well on Monday, 33 percent more than the amount collected on Sunday and the highest capture rate since it installed a new system last week to contain the spill.
The company later said it collected 7,850 barrels of oil in the 12-hour stretch ended at noon CDT (1700 GMT) on Tuesday. That brought the total collected since the cap was installed to 51,364 barrels.
But the ultimate solution to the leak lies in the drilling of a relief well and that won't be completed before August, meaning there could be a long hot summer of public discontent ahead.
BP faces a criminal investigation and lawsuits over the April 20 explosion aboard the Deepwater Horizon oil rig that killed 11 workers and triggered the spill.
The company has already spent more than $1 billion on the clean-up.
(Additional reporting by JoAnne Allen in Washington and Joanne Frearson, Harpreet Bhal and Natalie Harrison in London; writing by Ed Stoddard; editing by Anthony Boadle)
