London - British energy giant BP hopes it has stopped the catastrophic oil leak in the Gulf of Mexico but the job of rebuilding the company's battered fortunes has only just begun, analysts said on Friday.
The news that a giant cap had been placed over the well and all three of the device's valves had been shut raised hopes that the end was nearing to an environmental disaster which has made BP "enemy number one" in the United States.
But US President Barack Obama - who has promised to make BP face up to its obligations over the disaster - cautioned that celebrations were on hold until the cap had been tested and BP's executives adopted a cautious approach.
The first significant success in capping the well which began gushing oil four months ago did, however, cheer the markets with BP's share price rising almost four percent to 417.5 pence in afternoon London trade.
That success was relative though, because the company is still only worth two-thirds of its market value of £121bn on April 20 when the well exploded, killing 11 workers and sending the share price plunging.
Analysts said that while BP finally appeared to have stemmed the leak, it would struggle for months or even years to emerge from the crisis.
"The company is far from out of the woods," said analyst Peter Hutton at broker NCB Oils, but "it will be more in charge of its destiny than it has been at times".
It is difficult to exaggerate the importance of BP to the British economy.
Its fortunes are inextricably linked to British investors - the company accounts for one in every £7 paid in dividends to pension funds and employs 10 100 people in Britain out of a global workforce of more than 80 000.
Changed foreverIts global reach is enormous, embracing the Caucasus, Angola, Brazil, China and the Middle East.
So the British government is understandably concerned about the effects of the Gulf of Mexico disaster on the company, though it must choose its words carefully as it juggles US concerns about livelihoods ruined by the oil slick.
Top of BP's immediate concerns is the bill for the disaster and the compensation to those affected.
Analysts agree it will amount to between $30 and $40, with Goldman Sachs even estimating the final sum could be $70bn.
The extent of the damage and the cost should become clearer when the US investigation into the disaster publishes its findings on July 27.
Whatever the eventual outcome, the crisis has changed BP forever.
"The reputation of the company is fatally damaged and it's hard to see how they could possibly continue in a form similar to what they were before," said David Loudon of stockbrokers Redmayne Bentley.
"So what BP looks like in future, if it looks like anything, will be very different to what it did before the incident."
Speculation is rife that BP could be taken over by US rivals ExxonMobil or Chevron, although any deal would face formidable hurdles.
Analyst Hutton said: "They are out of the fire. Are they compromised as an entity? Will they go bust, will they be taken over by somebody else? I don't think this is necessarily the case.
"A scenario of a large deal is far more realistic than a mega merger."
He said a deal in the offing to sell a reported $12bn of assets to US company Apache Corporation was "probably the largest they will consider".
The Financial Times reported Friday that BP was speeding up the sale of up to $20bn of assets, including the sale of $12bn of assets to raise funds to foot the Gulf of Mexico bill.
And the analysts said heads might also roll once the disaster was over - with the public face of the disaster, chief executive Tony Hayward, possibly among the victims.
"Neither the chief executive nor the chairperson have performed well in the crisis and probably they are fatally wounded," Loudon said. "They would love to stay and help BP recover, but I would be surprised if they are allowed to do that."
- AFP