BP CEO: To Tell Congress He Grasps Spill's 'Terrible Reality'

BP PLC (BP, BP.LN) Chief Executive Tony Hayward will on Thursday tell the U.S. Congress that "I fully grasp the terrible reality" of a damaged well that continues to spew oil across the Gulf of Mexico.

"People lost their lives; others were injured; and the Gulf Coast environment and communities are suffering," Hayward will tell a U.S. House Energy and Commerce Committee subcommittee, according to testimony released by BP. "This is unacceptable, I understand that, and let me be very clear: I fully grasp the terrible reality of the situation."

The BP CEO faces a rough day on Thursday, where lawmakers remain skeptical about the oil company even after BP agreed to contribute $20 billion to meet claims filed in connection with the spill. The House subcommittee on oversight and investigations has put Hayward on notice that he should be "prepared to address" findings by congressional investigators that BP ignored warnings by its own personnel and contractors and proceeded with the Macondo well "for economic reasons."

Hayward will tell the panel that the exact cause of the spill will remain unclear until ongoing investigations are completed. But he will say that BP's own internal investigation suggests so far that the "accident was brought about by the apparent failure of a number of processes, systems and equipment."

Hayward will say that the BP probe is focused on seven "mechanisms," including the cement that seals the reservoir from the well and the casing system, which seals the well bore. Other areas of focus include pressure tests to confirm the well is sealed, and the execution of procedures to detect and control hydrocarbons in the well, he will say.

The blowout preventer, a last-resort mechanism to shut off the well, is the subject of still-other questions. Those include questions about an emergency disconnect system and features that are supposed to allow remotely operated vehicles to seal the well after a blowout, Hayward will testify. The blowout preventer was made by Cameron International (CAM). It was installed in the well that the Transocean Ltd. (RIG) rig was working on on April 20 when the rig exploded.

Hayward will also tell the panel that BP continues to look for an alternative to the toxic chemical being used to break up oil leaking from the well. The U.S. Environmental Protection Agency last month ordered BP to find an alternative dispersant. The company said it wasn't able to find a good replacement. The EPA responded by ordering BP to slash the use of the dispersant.

The BP CEO will say that the company accepted responsibility to clean up the spill and to compensate for economic and environmental obligations, spending almost $1.5 billion so far.

"BP has accepted this responsibility and will fulfill this obligation," Hayward will say. "We will not stop until the job is done."

BP has paid out more than $90 million on more than 56,000 claims that have been submitted, he will say.

"While the initial focus has been on individuals, we are now moving funds on an expedited basis to business owners with nearly $16 million to be paid out this week to businesses alone," he will say.

He will say that the company has deployed more than 2.5 million feet of containment boom--floating oil barriers--and more than 3 million feet of sorbent boom to contain the spill.

"We will be, and deserve to be, judged by our response," he will say.

Hayward will also say that the spill shows that the entire industry needs to be better prepared for an underwater disaster.

"It is clear that our industry needs to significantly improve our ability to quickly address deep-sea accidents of this type and magnitude," he will say.

-By Siobhan Hughes, Dow Jones Newswires; 202-862-6654; siobhan.hughes@dowjones.com

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