By Gerardo Garcia
CHETUMAL, Mexico (Reuters) - The Atlantic hurricane season's first named storm posed an uncertain threat to the Gulf of Mexico on Sunday, as a report said relief wells may halt the worst U.S. oil spill ahead of schedule.
Alex, downgraded to a tropical depression but expected to regain storm strength over the Gulf of Mexico later on Sunday, does not pose an imminent threat to oil-siphoning efforts at BP Plc's blown-out well off the Louisiana coast.
But even a miss that generates large waves could greatly complicate clean-up efforts from Louisiana to Florida from the undersea leak that has gushed oil since April 20, threatening fisheries, tourism and wildlife.
Alex has at least a moderate chance of becoming a major hurricane as it passes over the Gulf and makes landfall later in the week between Brownsville, Texas, and Tuxpan de Rodriguez Cano in Mexico, the U.S. National Hurricane Center said.
RELIEF WELLS
Official estimates suggest between 35,000 and 60,000 barrels of oil per day are spewing from BP's damaged well on the seabed about a mile below the surface.
The energy giant estimated its siphoning efforts collected more than 24,000 barrels on Friday and about 11,640 barrels in the first half of Saturday.
Britain's Sunday Times newspaper said BP could plug the leak in mid-July, two weeks before its guidance of early August. The drilling of two relief wells is going faster than expected, it said, citing sources familiar with the operation.
A BP spokesman declined to comment on the report and referred to a company statement on Friday that the relief wells would take about three months to complete. Drilling of the wells began in May.
New equipment being moved to the leak site in the coming week could raise the daily collection rate to 53,000 barrels, Coast Guard Admiral Thad Allen, who coordinates the U.S. oil spill response, said on Saturday.
Top officials are scheduled to review plans on Wednesday for a new containment system that could boost collection to 80,000 barrels per day, Allen said.
Progress on relief wells and other efforts could be halted if Alex or a subsequent storm comes too close.
For now, Alex does not pose such a risk. But when it moves back out over the warm waters of the southern Gulf, the storm is expected to strengthen again.
In Grand Isle, Louisiana, a tiny village jutting out into the Gulf of Mexico and a haven for commercial and recreational fishing, residents anxiously awaited updates on the storm.
"If it comes and it's somewhat severe, you might as well say goodbye to Grand Isle," said Pam Brooks, 50.
The Gulf disaster and its impact on London-based BP were on the agenda on Saturday when U.S. President Barack Obama and new British Prime Minister David Cameron met at a summit in Canada.
Shares of BP, a staple holding of many British pension funds, have been savaged since the crisis started and fell another 6 percent to a 14-year low on Friday.
Investors fret about the costs to BP, which include but are not limited to a $20 billion compensation fund it set up under intense U.S. political pressure. BP said it has paid out $2.35 billion so far in clean-up and compensation costs.
Obama has been highly critical of BP, even as his own poll ratings have fallen amid perceptions his handling of the Gulf crisis has been too slow.
Cameron and Obama "agreed that there was nothing to be gained from damaging BP as a going concern," a British official said after the leaders met at the G8/G20 summit in Canada. They also agreed BP must meet its obligations to cap the leak, clean up the damage and pay legitimate compensation.
British Finance Minister George Osborne told Reuters on Sunday that Britain stressed it was in both countries' interest that BP has a strong future as an important global business with many American and British investors.
LEGAL WRANGLING, PROTESTS
The Obama administration has asked a U.S. appeals court to stay a ruling from a federal judge that overturned a six-month ban on new deepwater drilling in the Gulf.
On Saturday, the state of Louisiana filed a legal brief opposing the administration request. Each day the ban is in place, "millions of dollars of income are lost to the citizens of Louisiana, and by the state," the brief said.
The disaster is also taking a heavy toll on fishing, tourism and the environment. About one-third of U.S. federal waters in the Gulf of Mexico remain closed to fishing.
The U.S. Fish and Wildlife Service reports a growing toll of birds, sea turtles and marine mammals, mostly dolphins, found dead or debilitated along the Gulf Coast.
In Florida on Saturday, hundreds of residents and supporters called for a halt to drilling in the Gulf.
"It's a sick feeling," said Cindy Nevens of Navarre Beach, Florida. "There is no end in sight and we don't know if it can be stopped or if they are telling us the truth about how much oil they are collecting."
(Additional reporting by Ernest Scheyder in Grande Isle, Sarah Young in London, Erwin Seba in Houston, Sumeet Desai in Toronto, Jose Cortazar in Cancun, Cyntia Barrera Diaz in Mexico City, Jeremy Pelofsky in Washington, and Mike Peltier in Florida; Writing by Ros Krasny and Jerry Norton; Editing by John O'Callaghan)
