BP Plc defended its embattled chief executive on Wednesday and denied a report he would leave soon as the company explored a new approach in the Gulf of Mexico to end the worst oil spill in U.S. history.

CEO Tony Hayward, criticized for his handling of the disaster, has the full support of the company's board and will remain in his job, a BP spokesman said, dismissing a Times of London report that he would step down within the next 10 weeks.

The Times, citing a person close to the matter, said Hayward would have to step down so the British energy giant could protect itself against a potential buyout threat by ExxonMobil or Royal Dutch Shell.

The environmental disaster caused by an April 20 oil rig explosion off the coast of Louisiana has devastated U.S. Gulf Coast tourism and fishing industries, dented President Barack Obama's approval ratings and complicated the traditionally close U.S. relationship with Britain.

BP capped the blown-out well last week, choking off the flow of oil into the sea for the first time in the three months since the explosion. On Tuesday, U.S. officials gave BP permission for another 24 hours of pressure tests on the capped well a mile below the ocean surface.

BP scientists are also weighing another option -- a static kill to help smother and plug the leak. This would involve pumping heavy drilling mud and possibly cement into the well, much like BP's failed top kill effort in May.

The top U.S. oil spill official, retired Coast Guard Admiral Thad Allen, said BP could have a plan on Wednesday to proceed with the static kill option.

With a storm brewing in the northern Caribbean, BP could be forced to delay work to plug the oil leak for up to two weeks if vessels at the site have to move, U.S. officials said.

Any operations out there would have to be suspended whether it's containment or the relief well, Allen said.

BP is drilling a relief well intended to intersect and plug the ruptured well next month.

BP's market value has fallen around 39 percent since the oil began spewing into the Gulf, and the company worked on Tuesday to line up $7 billion in asset sales to help pay for the spill.

BP SHARES RISE

BP shares in London and New York rose about 3.4 percent on Wednesday, buoyed by its sale of assets in the United States, Canada and Egypt to U.S. company Apache Corp, a large part of a $10 billion asset disposal plan.

Such a material sale, achieved so quickly, should ease if not banish any lingering concerns about BP's liquidity position, JP Morgan said in a note, adding that the terms of the deal looked robust and underlined the mismatch between what BP could get for its assets and its battered stock price.

Dutch bank ING said that BP could afford to go further than its $10 billion target, potentially making over $45 billion from divestments without denting its core activities.

BP said Apache would pay a $5 billion cash deposit on July 30 as part of the deal for exploration and production facilities in North America and Egypt. The company said the deal would include assets in New Mexico, natural gas in western Canada and concessions in Egypt.

Earlier, it announced it would sell $1.7 billion worth of assets in Vietnam and Pakistan.

The head of India's Oil and Natural Gas Corp told Reuters from Vietnam that the company would be interested in buying BP's stake in a $966 million Vietnam project. Vietnam's deputy minister of industry and trade said that BP should give priority to its partners in stake sales before offering them to outside parties.

HAYWARD SPECULATION

The spill sparked a wave of anger at BP among both the American public and U.S. lawmakers, and Hayward's ouster has been the subject of speculation after a series of public relations gaffes and a failure to quickly stem the flow of oil into the Gulf.

There was a growing expectation that Hayward would announce his departure in late August or September, with Robert Dudley, chief of BP's Gulf Coast restoration efforts, seen as the front-runner to replace him, the Times said.

But a BP spokesman said of Hayward: He has full support from the board and will remain in place.

Al Troner, president of Asia Pacific Energy Consulting in Houston, said Hayward was not entirely responsible for the disaster, although he seems to have an unfortunate tendency to put both his feet in his mouth.

There is more than enough blame to spread around here, whether it's BP, the drilling company or the federal government reaction, he said.

The continuing disaster remains high on the American and British political agendas and dominated a visit to Washington by British Prime Minister David Cameron.

The states of New York and Ohio asked a federal judge to appoint them lead plaintiffs in spill-related class-action lawsuits against BP. In a court filing, the states said their BP investments had lost $181 million because of the company's alleged misleading of investors over the spill.

(Additional reporting by Karolina Tagaris in London, Matt Spetalnick in Washington, Francis Kan in Singapore, Nidhi Verma in New Delhi and Ho Binh Minh in Dalat, Vietnam; Writing by John Whitesides; Editing by Will Dunham)

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