By Kristen Hays
HOUSTON (Reuters) - BP <:BP.LO:>Plc prepared on Tuesday to test a new cap on its runaway well in an effort to arrest the flow of oil gushing into the Gulf of Mexico for the last 12 weeks.
The tests, due to last between six and 48 hours, will begin later on Tuesday on BP's newly installed "capping stack", which has a better seal than the last cap placed on the well and aims to stop oil from spewing out of the failed blowout preventer.
As the oil giant prepared for a potential turning point in the worst offshore spill in U.S. history, it also said its plans to sell non-core assets, which will help pay for a $20 billion clean-up fund, were moving forward.
Both pieces of news helped BP shares maintain their recent recovery.
"We are in discussions with a number of companies about a number of assets," BP spokeswoman Sheila Williams said in London, declining to give details. "Talks are going well."
In Dubai, Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed al-Nahayan said the emirate was considering an investment in BP.
"We are still thinking about it," Bloomberg quoted him as saying when asked about buying a stake in the firm.
BP Chief Executive Tony Hayward visited Abu Dhabi last week and met with the sovereign wealth fund, the Abu Dhabi Investment Authority (ADIA).
Investors snapped up BP shares again in London and New York on optimism about possible asset sales and hopes the new technology could cap the 85-day-old gusher that caused the spill and hit the U.S. Gulf economy.
"It's a combination of the cap news and leftovers from the asset sales announcement, but more the asset sales announcement most likely moving the shares," said Joe Saluzzi, from Themis Trading in Chatham, New Jersey.
"There's still a lot of uncertainty when it comes to that cap, there's still a lot of work to be done so that probably won't move it unless we see some negative news," he added, noting any negative news on the cap would override the positive reaction to asset sales.
But the recent focus on divestments highlighted just how much a pounding BP shares have taken, since the firm's net asset value is around $80 billion more than its market value, said analyst Jason Kenney at ING in Edinburgh, who is bullish on the shares.
About seven non-core assets -- including ones in Alaska, Colombia, Venezuela and Vietnam -- could be worth $45-50 billion, he said.
In London the shares climbed as much as 5.5 percent to 420 pence, the highest in five weeks, while BP's U.S. shares were up 1.5 percent in morning trade -- bringing U.S. gains to around 40 percent since the stock collapsed to a low at the end of June.
BP said it would begin pressure tests by midday on Tuesday on the new containment cap just installed atop its leaking wellhead a mile underwater.
Kent Wells, senior vice president of exploration and production, said BP and government scientists would monitor the cap during the tests at "very minute intervals."
If tests progress as hoped, BP said no oil would flow from the well for the first time since a rig being drilled for BP by Transocean Ltd sank days after an explosion on April 20 that killed 11 workers.
During the tests, two smaller siphoning systems, including the one brought online on Monday, will be turned off. But BP warned the outcome was uncertain.
"The sealing cap system never before has been deployed at these depths or under these conditions, and its efficiency and ability to contain the oil and gas cannot be assured," BP said in a statement.
Depending on test results, BP will either keep the cap closed entirely or use it to resume siphoning oil to ships on the surface. If it works effectively, the cap should either hold all the oil in or allow it to be safely captured and funneled
away.
While the cap could contain the flow, Wells said relief wells remain the sole means to kill the leak permanently. The first of those wells has another 30 feet to drill before inserting pipe and preparing to intercept the blown-out well by the end of July, Wells said.
The potential breakthrough in efforts to fully contain BP's ruptured wellhead came a day after the Obama administration issued a revised moratorium on deep-water oil drilling. Critics said that just repackaged an earlier ban struck down by the courts.
Legal battles over the administration's bid to suspend deep-sea energy exploration in the Gulf already have had a chilling effect on drilling, putting tens of thousands of jobs at risk, industry officials and analysts say.
The moratorium and its toll on the industry were expected to be high on the agenda on Tuesday for a second day of hearings by President Barack Obama's independent oil spill commission, meeting in New Orleans.
(Additional reporting by Ayesha Rascoe and Alexandria Sage in New Orleans, Matthew Lynley in New York; Writing by Eric Onstad and Deborah Charles; Editing by Simon Denyer and Jerry Norton)
