Engineers and executives were watching closely Friday afternoon to see whether a cap that was containing the flow of oil from BP plc’s disastrous Macondo well in the Gulf of Mexico would continue to work. While early indications were positive that the the temporary fix was a success, later pressure readings suggested the well could be leaking elsewhere.

Pressures had not reached a level late Friday afternoon that would indicate that no other leaks from the well were occurring, said Retired Coast Guard Admiral Thad Allen, who is the government’s point man for the spill.

The cap was installed last Thursday afternoon and marked the first time that the flow of oil and gas from the well had been at least thought to be completely stopped since the April 20 well blowout.

“…[T]he new cap is good news,” President Obama told reporters Friday morning when success of the cap seemed more likely. “Either we will be able to stop the flow, or we will be able to use it to capture almost all of the oil until the relief well is done. But we’re not going to know for certain which approach makes sense until additional data is in. And all the American people should rest assured that all of these decisions will be based on the science and what’s best for the people of the Gulf.”

BP Vice President Kent Wells told reporters Thursday that at 2:25 CDT oil stopped flowing after engineers had gradually reduced the flow through the 75-ton cap. “I am very pleased that there’s no oil going into the Gulf of Mexico. In fact, I’m really excited there’s no oil going into the Gulf of Mexico,” Wells said.

BP shares gained 7.57% on the good news to close at $38.92 Thursday but gave back much of those gains on Friday, closing at $37.10 on the New York Stock Exchange, down 4.68%. BP shares are still a long way from their April 20 close of $60.48.

Shares of Transocean Ltd., owner of the doomed rig, also climbed Thursday, notching a gain of 4.47% on the New York Stock Exchange to close at $54.70. But like BP, it gave back much of that improvement on Friday, closing at $52.08, down 4.79%. Transocean is still a long way from its $92.03 close on April 20.

The cap is not a permanent fix. BP is continuing work on two relief wells, one of which is expected to permanently bring an end to the leak.

Meanwhile, the wide-ranging impact of the spill continues on, for BP, for the industry and for others. Reports are the company is preparing to sell a portion of its Alaska North Slope assets to help balance its books; the U.S. Interior Department has set a moratorium on deep water Gulf drilling and slowed the pace of shallow water drilling; and Congress is working on legislation for increased restrictions on offshore drilling (see separate stories).

If the well remains capped, the Gulf region can continue its massive cleanup efforts with some end in sight, and begin to make some progress in overcoming its latest economic and environmental disaster.

Meanwhile, the Interior Department’s chief oil and gas regulator last Thursday said BP must pay royalties on all oil and natural gas captured from the damaged Macondo well. The company also is potentially liable for royalties on lost or wasted oil and gas from the well if it is determined that negligence or regulatory violations caused or contributed to the Deepwater Horizon explosion and resulting oil spill.

Michael Bromwich, director of Interior’s Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM), notified BP America’s tax department in a letter that said failure to fulfill these obligations could be considered knowing and willful violations of the Federal Oil and Gas Management Act. BP is required to pay royalties immediately for oil and gas captured from the Macondo well, he said.

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