BP PLC (BP) shares rose as much as 4.3% Monday morning as fears subsided that a tropical storm would disrupt the cleanup operation, but that good news was tempered by a sharp increase in the company's daily rate of spend on Gulf of Mexico operations to $100 million.

At 1121 GMT BP shares were up 3.0%, or 9 pence, at 314 pence, the second biggest rise on London's FTSE 100 index. BP's market value has more than halved since the oil spill began in April.

Tropical storm Alex, which had threatened to disrupt the response to the Deepwater Horizon oil spill, was headed far to the west of the site, according to the National Hurricane Center.

Meanwhile, BP said the total cost of oil spill containment, cleanup and compensation has risen to $2.65 billion, compared with $2.35 billion Friday. BP was spending just $6 million a day when the spill began in April, but that cost has soared to $100 million a day as the slick has spread and efforts to cap the leaking well have intensified.

BP reiterated its timetable for the drilling of two relief wells, which may be the only way to permanently halt the flow of oil from the leaking well. The wells are ahead of schedule, said a BP spokeswoman, but the company retains its estimate that they will reach their target in early to mid-August, contradicting press reports that the operation could be complete in just more than two weeks.

The relief well may be ahead of schedule but "the drilling is important, BP will be ultra-cautious," said NCB Stockbrokers analyst Peter Hutton. This caution, and getting official approval for every step of the complicated process of intersecting the leaking well and blocking it, "will slow down the normal process," he said.

 
   -By James Herron, Dow Jones Newswires; +44 (0)20 7842 9317; james.herron@dowjones.com
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