Deepwater oil drilling ruling stands: judge

A U.S. federal judge in New Orleans has refused to delay his decision to strike down a six-month moratorium on deepwater drilling imposed after the oil spill in the Gulf of Mexico.

The Justice Department had asked U.S. District Judge Martin Feldman to stay his ruling while it appeals to the 5th U.S. Circuit Court of Appeals.

Feldman rejected that request Thursday. Two days earlier, he struck down the Interior Department's decision to halt approval of new permits for deepwater projects and suspend drilling on 33 exploratory wells.

The Justice Department said in court papers that Interior Secretary Ken Salazar has instructed all employees not to take any action to enforce the moratorium.

But the department argues delaying Feldman's ruling would eliminate the risk of another drilling accident while new safety equipment standards and procedures are considered.

Feldman had agreed to hold an emergency hearing by phone Thursday on a motion filed by several oilfield service companies who say the Obama administration is ignoring his ruling.

But he informed attorneys only minutes before the call was scheduled to start that he will rule without hearing oral arguments. The hearing would not have been open to the public.

Separately, a number of environmental groups asked the court to release additional information about Feldman's financial interests.

The judge's financial disclosure report for 2008, the most recent year available, shows holdings in at least eight petroleum companies or funds that invest in them, including Transocean Ltd., which owned the Deepwater Horizon drilling rig that blew up and set off the spill.

The report shows that most of his holdings were valued at less than $15,000; it did not provide specific amounts.

It also says the department is sending letters to operators who received notices of suspension that those notices have no legal effect at this time.

Cap reattached

BP reattached a containment cap late Wednesday to the damaged well gushing oil into the Gulf of Mexico, after removing it 11 hours earlier following a mishap.

Crews removed the cap at about 10 a.m. ET after an underwater robot bumped a venting system. Without the cap, the well gushed full force, spewing tens of thousands of litres of crude virtually unabated into the water.

Engineers used remote-controlled submarines to reposition the cap, which resumed capturing oil at about 8:30 p.m. ET, BP said.

BP said Thursday its oil-capture systems collected or burned roughly 16,830 barrels of oil on Wednesday, far fewer than the roughly 27,000 barrels captured the day before.

Bob Dudley, BP's new point man for the oil response, said crews had done the right thing to remove the cap because fluid seemed to be leaking and could have been a safety hazard.

"It's a setback, and now we will go back into operation and show how this technology can work," Dudley said before the system was working again.

While the cap was off, clouds of black oil gushed unchecked again at up to 393,682 litres per hour, though a specialized ship at the surface managed to suck up and incinerate 1.7 million litres.