Two chief executives of US integrated oil companies denounced provisions before the US Congress that would eliminate the legal liability cap for economic damages from an oil spill.

Bills in the US Senate and House of Representatives are in part a legislative response to the massive oil spill that resulted from the fatal 20 April explosion and subsequent sinking the Deepwater Horizon rig at BP's Macondo well in the US Gulf of Mexico.

Eliminating the liability cap “will end up being quite punitive for the industry”, ConocoPhillips chief Jim Mulva told analysts on an earnings conference call today. He added that such a measure would limit offshore US operators to only the very largest companies.

Hess chief executive John Hess instead proposed a $1bn liability cap supplemented by a cooperative insurance agreement among companies. Anything higher than that “would be destructive to competition in the Gulf,” he said.

The House bill would block companies with poor safety records from operating on the US outer continental shelf, establishing standards that currently would prevent BP from participating as an operator in the region. It also would impose new standards for blowout preventers and well design and require offshore facilities be built in the US.

The Senate bill also would lift the cap, raise the per-barrel fee producers pay to the Oil Spill Liability Trust Fund, encourage production of heavy-duty trucks that run on natural gas, provide incentives for home energy efficiency improvements and increase funding for land and water conservation programs.

Senate Democratic leaders expect a vote on that bill early next week. However, even if both measures pass, they would need to be smoothed out in a conference committee between the chambers after the August recess, and getting a final bill passed so closed to the contentious November elections could be difficult.

As for the Macondo effort itself, BP is on schedule to begin a so-called static kill as early as 1 August if all the preparation sequences are completed according to plan, the US government said today. The

operation involves pumping mud and other material into the top of the capped Macondo well.

BP removed the plug that was installed in the first relief well ahead of tropical storm Bonnie and is preparing to run the hole with drill pipe, national incident commander and former US Coast Guard admiral Thad Allen said today.

When the drill string is completed, the casing pipe will go in and will then be cemented. “Once that is in place that will be the cue to start the static kill,” Allen said. After the static kill, BP will drill into the annulus for the bottom kill procedure.

Even if the static kill is successful, the well will only be considered permanently plugged once the bottom kill procedure is completed. Only that will assure that no oil is coming up through the annulus, Allen said.

The pressure on the well continues to rise and was at 6,942psi this afternoon, indicating the well has integrity, Allen said. No anomalies have been detected.

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