By Sumeet Desai and Kristen Hays
TORONTO/HOUSTON (Reuters) - Fearing the "destruction" of BP <:BP.LO:>Plc, Prime Minister David Cameron said on Friday some clarity is needed over its costs from the Gulf of Mexico oil spill even as the company's stock plunged to a 14-year low.
As clean-up and containment operations forged on, the first tropical depression of the 2010 Atlantic hurricane season formed on Friday in the western Caribbean, a development that could disrupt such efforts for days or weeks.
And on the legal front, the Obama administration asked a U.S. appeals court to stay a ruling that lifted a temporary ban on deepwater oil drilling, its latest attempt to clamp down in the wake of the worst spill in U.S. history.
The disaster in the Gulf has thrust itself to the top of the political agendas of U.S. President Barack Obama and Britain's Cameron, who gave his strongest comments yet on the subject ahead of expected talks between the two leaders on Saturday at the G8/G20 summits in Canada.
"It is also in all our long-term interests that there is some clarity, some finality, to all of this, so that we don't at the same time see the destruction of a company that is important for all our interests," Cameron told Canadian broadcaster CBC.
Share losses for the embattled energy giant since the spill began on April 20 stand at around $100 billion (66.4 billion pounds), more than halving its market value prior to the disaster. BP stock on Friday fell more than 6 percent in London and New York.
BP hopes to nearly double its capacity for siphoning oil gushing from its ruptured deep-sea well by next week, but the looming storm is raising fears such work could be hampered.
The depression had sustained winds of 35 miles per hour (56 km per hour) as of late on Friday. Strengthening is forecast.
It was centred 355 miles (570 km) southeast of Cozumel, Mexico and moving west-northwest at 10 mph (17 kph) on a path that would take it into the Gulf of Mexico, where workers are battling to contain the spill, though it was too early to tell if it would affect such operations.
U.S. Coast Guard Admiral Thad Allen, who oversees the federal relief effort, said it would be necessary five days ahead of the arrival of any gale force winds to start to take dismantle current operations involving ships and equipment collecting some of the oil spewing from the ruptured well.
Because of this, oil could flow unchecked from the ruptured well into the sea for up to 14 days, Allen said.
ALL EYES ON OBAMA/CAMERON
Away from the Gulf, all eyes were on the outcome of Saturday's Cameron/Obama meeting. The U.S. president has been highly critical of BP while his own poll ratings have fallen, in part because of the perception that his handling of the growing ecological and economic crisis has been slow.
Business and shareholder groups meanwhile have clamoured for Cameron to defend the company.
BP said it has paid out $2.35 billion so far in clean-up and compensation costs related to the spill.
That does not include a $20 billion fund it has agreed to set up, nor the billions of dollars it will have to pay in fines. Under the Clean Water Act, BP could potentially face penalties of at least $15 billion.
"This is a vital company for all of our interests. ... BP itself wants to cap the well and clean up the spill and compensate those who have had damages," Cameron said.
" ... It will do these things. I want to work with everyone concerned to try to make sure that out of all this there will still be a strong and stable BP," he added.
BP was once a predominantly British company but now has global operations and a major presence in the United States. Around 40 percent of its shareholder base is in Britain and a similar proportion is drawn from the United States.
Kenneth Feinberg, the man appointed by Obama to oversee BP's $20 billion compensation fund, said it made "absolutely no sense" to drive the company into bankruptcy. He was speaking at a public event in Larose, Louisiana.
In an interview with the Financial Times, Feinberg said spill victims should be compensated if their claims would be applicable under state or maritime law.
"Would your claim be applicable under state and, in this case, maritime law? If the state would recognise it, then I will recognise it. If not, I should not," he told the paper. It added Feinberg would set a cut-off date for filing emergency claims, probably one or two months after the spill ends.
The well ruptured on April 20 when an explosion blew up an offshore rig on the surface above it, killing 11 workers. The spill has soiled the U.S. Gulf coastline and threatened multibillion dollar tourism and fishing industries.
BP STOCK
In London, its stock plunged 6.4 percent on Friday, trading at its lowest levels since 1996, on talk it needs extra cash to fund the clean-up and worries about bad weather. On Friday, U.S.-listed shares dropped 6.1 percent, also to a 14-year low, on a rumour that analysts recommended the company sell stock.
"There was talk that a couple of Wall Street analysts had recommended the company do a $10 billion equity offering. Aside from all the other problems facing the company, if they issued shares now, it would represent dilution to current shareholders," said Michael Sheldon, chief market strategist at RDM Financial in Westport, Connecticut.
A spokesman for BP said it had "considerable firepower" to meet the costs of the spill and denied market talk that the company was seeking bankruptcy protection.
In the Gulf, BP said its oil-capture systems collected or burnt off 23,725 barrels of oil on Thursday.
U.S. Coast Guard Admiral Thad Allen, who oversees the federal relief effort, said BP was on track to nearly double its oil collection capacity next week -- provided the tropical depression does not sweep into the area.
The U.S. government estimates between 35,000 (1.47 million gallons/5.56 million litres) and 60,000 barrels (2.5 million gallons/9.5 million litres) a day are leaking from the well.
BP said two relief wells that offer the best hope of plugging its well were on track to intercept their target at a depth of 18,000 feet (3.4 miles/5.5 km). The wells are due to be completed in August.
Meanwhile, the legal battles raged.
The Justice Department filed an emergency request with the U.S. Court of Appeals for the Fifth Circuit, based in New Orleans, to put on hold a decision by Judge Martin Feldman that blocked a six-month suspension on exploratory and development drilling in U.S. waters from being enforced.
(Additional reporting by Jane Sutton in Miami, Jeremy Pelofsky in Washington and Jon Boyle in London; writing by Ed Stoddard and Will Dunham; editing by Todd Eastham)
