People walk toward the U.S. Capitol in Washington March 4, 2013.

WASHINGTON | Fri Mar 15, 2013 5:26pm EDT

WASHINGTON (Reuters) - A bipartisan group in the House of Representatives is close to completing work on a comprehensive immigration reform bill that would include a pathway to citizenship for 11 million illegal immigrants living in the United States, according to congressional aides.

Two of the aides confirmed on Friday that the negotiators were still trying to agree on the issue of how to handle temporary laborers coming into the United States.

House Speaker John Boehner, a Republican, was briefed on Friday on the legislation, which congressional aides described as being nearly complete. House Democratic leader Nancy Pelosi received a briefing on Thursday, said one senior Democratic aide.

Michael Steel, a spokesman for Boehner, said: "The speaker had a good talk with the Republicans in the bipartisan immigration reform group. They've made real progress on a tough issue." He said the group would continue to work on the measure.

Boehner's office would not comment on details of the bipartisan group's work.

The back-to-back briefings for Pelosi and Boehner were "to let them know they were close to a finished product," said one House aide with knowledge of the issue.

In the Senate, a bipartisan group also neared completion of its own broad immigration bill, said senators and Senate aides.

Andrea Zuniga DiBitetto, a lobbyist for the AFL-CIO labor federation, said, "We're confident that a deal is going to be reached."

Leading senators have said the goal is to introduce a bill by early April. If things go as planned, the legislation could be ready for Senate floor debate by June or July.

Proponents in the House hope to pass their version of a bill this year.

A comprehensive reform bill, if it comes together, would aim to further toughen border security, deal with the millions living illegally in the United States and develop a way to streamline the future legal flow of immigrants, including temporary workers.

Prospects for legislation got a major boost last November, when Hispanic-Americans voted overwhelmingly to re-elect Democratic President Barack Obama.

The election results jolted Republicans, many of whom had taken a hard-line stance against any immigration reforms other than securing the southwestern border with Mexico and luring more skilled workers from abroad for U.S. high-tech firms facing labor shortages.

Although most Republicans say they now want to see some sort of immigration bill enacted this year, many are still hesitant about, or opposed, to giving 11 million illegal immigrants a special pathway to citizenship, arguing that would reward them for breaking the law and encourage a new wave of illegal border crossings.

TOUGHEST CHALLENGE

Among the toughest issues the group of eight senators has wrestled with, more so even than a path toward citizenship, involves maids, waitresses and other low-paid foreign workers.

The group, which includes Florida Republican Senator Marco Rubio, a potential 2016 presidential candidate, is trying to create a system allowing businesses to hire more low-skilled workers to fill shortages, but only after they show that they cannot find Americans to take the jobs.

In the past two weeks, the senators have submitted proposals to the AFL-CIO, the biggest labor group, and the U.S. Chamber of Commerce, the largest business group. But those two groups remain deeply divided.

Talks "have been difficult," Randel Johnson, the chamber's senior vice president of labor and immigration, told reporters on Friday. "What is the overall cap of the (temporary visa) program is an issue," he said.

The chamber wants 400,000 visas a year. The AFL-CIO wants to cap visas in "very low five figures," said Johnson.

The chamber and the AFL-CIO had agreed that a new temporary worker program, which unions previously opposed on grounds it exploits workers, would eventually let some of the immigrants earn U.S. citizenship.

Johnson could not say how many of the temporary workers would be allowed to earn citizenship, except to say they would have to meet certain criteria such as having no criminal record.

That also is the case for the 11 million undocumented people in the United States, according to the Senate initiative outlined in late January.

Under the Senate measure, they would have to have clean criminal records, pay back taxes and a penalty and learn to speak English. In practice, it could take up to 15 years for someone to earn citizenship. But they would not live under the threat of deportation.

The group has discussed creation of a commission, perhaps within the Labor Department, to oversee the annual admission of low-skilled foreign workers. It would consider factors including the jobless rate in specific sectors, such as those that employ hotel and restaurant workers.

(Additional reporting by Rachelle Younglai; Editing by Fred Barbash and Peter Cooney)

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1 of 2. A man walks in front of a company logo outside an Apple store in downtown Shanghai January 24, 2013.

SHANGHAI | Fri Mar 15, 2013 2:14pm EDT

SHANGHAI (Reuters) - Technology giant Apple Inc and car maker Volkswagen AG were singled out by state-run China Central Television (CCTV) in its annual corporate malpractice expose.

On its "3.15" investigative special aired late on Friday, CCTV said that Chinese customers were not given the same post-sales service from Apple as it gave to users in other markets.

The report also said that the direct shift gearbox (DSG) transmission, a long-standing issue for Volkswagen, was causing cars to speed up or slow down during driving.

Volkswagen, which plans to almost double production capacity in China to 4 million cars in the next five years, promised action in response to the "3:15" show, whose name refers to the date of World Consumer Rights Day.

"We take this report very seriously and we will quickly make contact with our consumers to resolve the issue," it said on its official Chinese Weibo microblog.

In a statement Apple China said: "Our team is always striving to exceed our customers' expectations, and we take any customer concerns very seriously."

Apple looks to China not just as its main production base, but also to re-energize slowing growth, the result of rising smartphone penetration in mature markets. CEO Tim Cook sees the world's No. 2 economy as virgin expansion territory, and Apple singles out the region in every quarterly results report.

The television show has named and shamed a number of prominent Western companies in the past, hitting the sales and stocks of its targets in a retail market that is forecast to be the world's largest in three years.

Last year "3:15", one of the most widely watched shows in China, singled out fast-food giant McDonald's Corp and French hypermarket chain Carrefour SA for food safety violations.

The companies were forced to apologize and their shares slumped as China's army of half a billion microbloggers unleashed their anger online.

U.S. retailer Wal-Mart Stores Inc. and Korea's Kunho Tire Co Inc also have been blasted by state TV on Consumer Rights Day.

SAFETY CONCERNS

In December, a separate state television report triggered a food safety scare at Yum Brands Inc. restaurants, cutting its China same-restaurant sales by 20 percent in January and February.

Chinese companies have not been spared from scrutiny.

Public concern about food safety, pollution and corporate corruption has intensified over the last few years, after state media exposed malpractice at local firms including web search engine Baidu Inc and milk producer Inner Mongolia Yili Industrial Group Co.

"These TV exposes create the impression that you can't trust that brand," said Torsten Stocker, head of Greater China consumer practice at Monitor Deloitte. "If there's some smoke then maybe there's much bigger fire."

In a bid to preempt any negative publicity on Consumer Rights Day, some companies launched customer-friendly promotions ahead of the TV show. McDonald's will give out free breakfasts on Monday and Wal-Mart launched an "adopt-a-tree" campaign.

But some Chinese consumers said that the revelations from the "3.15" show would nonetheless have a significant impact on their choice of products in the future.

"I think the exposure of these companies makes them hard to believe again, at least I myself will boycott these companies," Sherry Chen, a clerk at DBS bank in Shanghai, told Reuters in the city's affluent financial district ahead of Friday's show.

The show also stirred up vitriol online in China. Within an hour of the broadcast, Apple had been mentioned 50,000 times on popular web microblog Weibo, China's version of Twitter which has more than half a billion users.

While many posts on Weibo were negative, the targeted companies may take solace that some users were not entirely convinced by the "3.15" show, which is a colorful mixture of under-cover footage and pro-consumer song-and-dance routines.

"Tonight's 3.15 hit out against corruption. But the most fraudulent thing at the end of the night was the show itself," posted Weibo user 'Soledad Horse'. "Oh CCTV, can't you try and find some intelligence from now on?"

(Additional reporting by Fang Yan; Editing by Miral Fahmy and Michael Roddy)

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A computer screen is pictured before a scientific seminar to deliver the latest update in the search for the Higgs boson at the European Organization for Nuclear Research (CERN) in Meyrin, near Geneva July 4, 2012.

GENEVA | Thu Mar 14, 2013 11:08am EDT

GENEVA (Reuters) - Physicists who last summer triumphantly announced the discovery of a new particle but held back from saying what it was, declared on Thursday there was now little doubt it was the long-sought Higgs boson.

Latest analysis of data from the Large Hadron Collider (LHC) particle accelerator, where the boson was spotted as a bump on a graph early in 2012, "strongly indicates" it is the Higgs, said CERN, the European Organisation for Nuclear Research.

Physicists believe the boson and its linked energy field were vital in the formation of the universe after the Big Bang 13.7 billion years ago by bringing flying particles together to make stars, planets and eventually humans - giving mass to matter, in the scientific jargon.

The particle and the field, named for British physicist Peter Higgs who predicted their existence 50 years ago, are also the last major missing elements in what scientists call the Standard Model of how the cosmos works at the very basic level.

But the CERN statement stopped short of claiming a discovery - which would clear the way to Nobel prizes for scientists linked to the project - and floated the idea that this might be an exotic "super-Higgs" offering a key to new worlds of physics.

"It remains an open question whether this is the Higgs boson of the Standard Model ... or possibly the lightest of several bosons predicted in some theories that go beyond the Standard Model," said CERN, a large complex on the edge of Geneva.

"Finding the answer to this question will take time."

Although some CERN physicists privately expressed irritation at the continuing refusal to - as one said - "call a Higgs a Higgs", others argued that this could only come when the evidence was all totally irrefutable.

If it is not what one CERN-watching blogger has dubbed a "common or garden Higgs" but something more complex, vistas into worlds of supersymmetry, string theory, multiple dimensions and even parallel universes could begin to unfold.

WHAT KIND OF HIGGS?

"To me it is clear that we are dealing with a Higgs boson, though we still have a long way to go to know what kind of Higgs boson it is," said Joe Incandela, spokesman for CMS, one of the two independent CERN LHC monitoring teams.

"There is every possibility that it is a Higgs boson from a more complex model, such as supersymmetry (a theory which says every elementary particle has a so-far unseen heavier partner)," another CMS researcher, John Conway, told Reuters.

In recent months, rumors have flown that the particle might be some sort of super-Higgs - "the link between our world and most of the matter in the universe" as predicted by U.S. physicist Sean Carroll in a new book.

But David Charlton, who speaks for the ATLAS team, said the latest analysis, presented on Thursday to a conference in the Italian Alps, pointed to the particle fitting the Standard Model - which would exclude exotica.

However, CERN scientists agree nothing startlingly new could be expected until much later in the decade, well after the LHC - shut down last month for two years to allow its power and reach to be doubled - resumes operations in early 2015.

In the giant subterranean collider, which started up in March 2010, particles are smashed together hundreds of times a second at near the speed of light to simulate the Big Bang. The debris is then tracked on huge detectors.

But the new particle turns up only once in every trillion collisions - leaving the thousands of physicists and analysts at CERN, and in laboratories around the world, the massive task of deciding what data to discard.

(Reporting by Robert Evans; Editing by Pravin Char)

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n">(Reuters) - Model year 2012 passenger vehicles sold in the United States had an average fuel economy rating of 23.8 miles per gallon, the highest on record, the U.S. Environmental Protection Agency said on Friday.

Last year's models showed a 1.4 mpg improvement over 2011, the biggest annual improvement since the EPA began keeping records on fuel economy.

Improving fuel economy is a key component of the Obama administration's effort to cut U.S. oil consumption and polluting greenhouse gases, which cause global warming.

Model year 2012 cars and light-duty trucks sold in the United States average emissions of 374 grams of carbon dioxide, down from 398 grams per mile in the previous model year, the EPA report said.

Carbon dioxide accounts for the lion's share of greenhouse gas emissions globally.

The EPA said the figures released in its report, which can be seen at 1.usa.gov/XcUqqj are preliminary.

Among major manufacturers, Honda Motor Co showed the highest average fuel economy of 26.4 mpg, followed by Volkswagen AG at 26.2 mpg, Mazda Motor Corp and at 25.9 mpg.

Among U.S. automakers, Ford Motor Co vehicles reported the best average fuel economy at 23.2 mpg, up from 21.1 mpg for its 2011 models, the EPA said.

Hyundai Motor Co would have the highest for 2012 vehicles, at 28.8 mpg, but its figures are under investigation by the EPA. In November, the EPA announced that it was investigating Hyundai and its corporate sister Kia Motors Corp after its own tests showed less performance than what the automakers claimed.

U.S. automakers have more pickup trucks and large sport utility vehicles in their lineups, which increases their corporate average fuel economy (CAFE) ratings.

Auto manufacturers have increased the number of hybrid gasoline-electric vehicles, plug-in vehicles as well as increased fuel economy for internal combustion gasoline engines in recent years, largely spurred on fuel economy targets set by the Obama administration.

In 2011, Obama reached a deal with major automakers that fuel economy for each manufacturer will rise to an average of 54.5 mpg by 2025. By model year 2016, U.S. cars and light-duty trucks by each manufacturer are to average 35.5 mpg.

The EPA said the longer term trend of improving fuel economy ratings began with the 2005 model year, during the Bush administration.

Since the 2007 model year, U.S. passenger vehicles have shown a 13-percent increase in fuel economy ratings and a 16 percent reduction in carbon dioxide emissions.

(Reporting by Bernie Woodall; editing by Sofina Mirza-Reid)

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NEW YORK | Wed Mar 13, 2013 10:01pm EDT

NEW YORK (Reuters) - Author Claire Vaye Watkins won the annual Story Prize for short fiction on Wednesday for her collection of short stories that focus on the American West.

Watkins, an assistant professor at Pennsylvania's Bucknell University, won a $20,000 cash prize for "Battleborn," a series of 10 stories published by Riverhead Books that delve into the struggles of characters in both the historical and contemporary West.

With settings ranging from the gambling meccas of Reno and Las Vegas to rural brothels and Gold Rush towns, some of the stories are informed by Watkins' family notoriety - her father was a member of the Manson family and testified against Charles Manson at Manson's murder trial before dying of leukemia in 1990. The first story is entitled "Ghosts, Cowboys."

Watkins herself was born and raised in the unforgiving lands of the Mojave Desert, where she remains co-director of the Mojave School, a non-profit creative writing workshop for teenagers in rural Nevada.

The other finalists for the prestigious award, each of whom received $5,000, included Pulitzer Prize winner Junot Diaz for "This Is How You Lose Her," and National Book Award finalist ("Among the Missing") Dan Chaon for "Stay Awake."

The finalists, all of whom read excerpts and discussed their work on Wednesday at The New School, a university in Greenwich Village, were chosen from a list of 98 entrants.

In choosing Watkins, the judges cited the first-time author for "the audacity of her voice."

"In the 10 stories in her first collection, Claire Vaye Watkins takes an unflinching look at the apocalyptic dimensions of our culture's boom-or-bust obsession," they said in a joint statement.

"She's a fierce and original new writer, and 'Battleborn' is an astonishing short story collection," they added.

The judges were critic and author Jane Ciabattari, author and past Story Prize finalist Yiyun Li and New York City bookseller Sarah McNally.

Past winners of the annual prize have included Mary Gordon, Jim Shepard, Tobias Wolff and last year's winner, Steven Millhauser.

(Reporting by Chris Michaud; Editing by Jan Paschal)

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''Hannibal Crossing the Alps on an Elephant'', a painting by Nicolas Poussin, is seen in this undated handout picture provided by Christie's in London March 15, 2013.

LONDON | Fri Mar 15, 2013 6:46pm EDT

LONDON (Reuters) - Auction house Christie's will offer an unconventional painting by French classical artist Nicolas Poussin, depicting Carthaginian general Hannibal astride an elephant, in July, expecting it to fetch 3-5 million pounds ($4.5-7.5 million).

The early work is not considered one of the artist's best and was little known until it appeared in public at an exhibition in Rouen in northern France in 1961.

But the auction house is hoping that its provenance - the painting was originally in the collection of Poussin's greatest patron in Rome, scholar Cassiano dal Pozzo - will help boost interest when it goes under the hammer in London on July 2.

"It was painted right after he arrived in Rome and he obviously developed as his career progressed," said Georgina Wilsenach, head of old master and British paintings at Christie's.

"I don't think that takes away its appeal," she added. "It is quite unusual. In terms of (Poussin) works coming up for auction, I think that most are religious paintings or mythological subjects."

The canvas, dating from the mid-1620s and measuring around 1.0 by 1.35 meters, depicts Hannibal on an elephant leading his troops on the fabled journey from Iberia into northern Italy via the Alps to attack Roman forces in the Second Punic War.

The dramatic early picture from an artist famed for works like "The Death of Germanicus" and "The Abduction of the Sabine Women" was snapped up by Cassanio for the then extravagant sum of 40 scudi.

According to Christie's, Poussin's patron paid over the odds for Hannibal in an apparent bid to help the artist who had fallen seriously ill while in Rome and, unable to work, found himself penniless.

PATCHY AUCTION RECORD

Poussin and Cassiano met soon after the French painter moved to Rome in 1624, but Cassiano was dispatched abroad on a papal legation and during his absence the artist lived hand-to-mouth and was forced to sell his pictures for whatever he could get.

Those financial difficulties ended with the return of Cassiano, who, along with his younger brother Carlo Antonio, acquired almost 50 works by Poussin including some of his masterpieces like the first "Seven Sacraments" series.

Poussin is considered one of the most influential artists in European art history and in 1640 was summoned by French king Louis XIII to be court painter, but his record at auction does not always reflect his reputation.

The highest price for a work by Poussin at auction is $6.7 million, set at Sotheby's in 1999 for "The Agony in the Garden".

When Christie's offered the key "Sacrament of Ordination" in 2010 for 15 to 20 million pounds, it did not find a buyer.

Eventually that work - a Cassiano commission and among the most important in Poussin's oeuvre - sold to the Kimbell Art Museum in Texas for $24.3 million in a private deal, the New York Times reported in 2011.

Wilsenach said she believed Poussin's depiction of Hannibal could appeal to collectors not normally interested in old master paintings yet attracted by the dramatic and powerful subject matter.

The picture would be on show in New York during Asian art week and also visit Moscow before the auction in recognition of that potential appeal, she added.

Something similar may have happened in New York in January, according to Wilsenach, when a 1574 Scipione Pulzone portrait of Jacopo Boncompagni in magnificent armor fetched $7.6 million at a Christie's sale versus estimates of $1.5-2.5 million.

(Reporting by Mike Collett-White, Editing by Belinda Goldsmith)

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Chinese dissident artist Ai Weiwei talks on his mobile phone as he walks near the entrance to his studio in Beijing June 20, 2012.

BEIJING | Mon Mar 11, 2013 6:47am EDT

BEIJING (Reuters) - Dissident Chinese artist Ai Weiwei announced plans on Monday to release a heavy-metal album that he said would "express his opinion" just as he does with his art.

The burly and bearded Ai said 81 days in secretive detention in 2011, which sparked an international outcry, triggered his foray into music.

"When I was arrested, they (his guards) would often ask me to sing songs, but because I wasn't familiar with music, I was embarrassed," Ai, 55, said in a telephone interview. "It helped me pass the time very easily.

"All I could sing was Chinese People's Liberation Army songs," Ai said. "After that I thought: when I'm out, I'd like to do something related to music."

A court in September upheld a $2.4 million fine against Ai for tax evasion, paving the way for jail if he does not pay. Ai maintains the charges were trumped up in retaliation for his criticism of the government.

The world-renowned artist has repeatedly criticized the government for flouting the rule of law and the rights of citizens.

Ai's debut album - "Divina Commedia", after the poem by Italian poet Dante - is a reference to the "Ai God" nickname in Chinese that his supporters call him by. "God" in Chinese is "Shen", while "Divina Commedia" in Chinese is "Shen qu".

Two songs are about blind legal activist Chen Guangcheng, whose escape from house arrest last April and subsequent refuge in the U.S. Embassy embarrassed China and led to a diplomatic tussle.

One song on the album is called "Hotel Americana", a dig at the U.S. Embassy for sheltering Chen. Another is "Climbing over the Wall" - a reference to Chen's scaling of the walls in his village to escape, and Chinese Internet users circumventing the "Great Firewall of China", a colloquial term for China's blocking of websites.

Ai said he was not worried about government persecution for his album, which will be out in about three weeks. But he is gloomy about the prospects of it being sold in China, saying he will distribute the album online "because music is also subject to review" in China.

Ai said his time in the recording studio did not mean that he was moving away from art.

"I think it's all the same," he said. "My art is about expressing opinion and communication."

Ai said he was working on a second album, with pop and rock influences, that he hoped people would sing along with.

"You know, I'm a person that's furthest away from music, I never sing," Ai said. "But you'll be surprised. You'll like it."

(Reporting by Sui-Lee Wee; Editing by Nick Macfie)

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A visitor looks at a ten-piece set paper screenprint of Mao Zedong by Andy Warhol, which is part of Warhol's series of the late Chinese leader, displayed at the Hong Kong Convention and Exhibition Centre during Christie's 2008 Spring Sales May 26, 2008.

LONDON | Wed Mar 13, 2013 8:33pm EDT

LONDON (Reuters) - Chinese spending on art and antiques shrank by nearly a quarter in 2012, ending a streak of spectacular growth that helped drive up global prices and made China the biggest player in the market by 2011, a report said on Thursday.

The study, commissioned by the European Fine Art Foundation which organizes The European Fine Art Fair (TEFAF), estimated the worldwide art and antiques market contracted by seven percent last year to 43 billion euros ($56 billion).

The study, compiled by academic Clare McAndrew, founder of the consulting firm Arts Economics, estimated Chinese art sales fell 24 percent to 10.6 billion euros in 2012.

Auction sales in China dropped an even steeper 30 percent, pushing it into second place in the art market rankings with a 25 percent share behind the United States, which regained its position as market leader with 33 percent.

Britain remained the world's third most important art market at 23 percent, according to the study released to coincide with this year's TEFAF which opens in Maastricht on March 15.

"The main reasons for the deceleration in (Chinese) growth were both demand factors (including a slowdown in economic growth and continuing liquidity constraints) and a reduced amount of high quality, high priced works coming onto the market," said the report.

"Many art funds and other speculative investors also reduced their participation in the market during the year."

The study added that collectors were increasingly focusing on works by so-called "blue chip" artists.

"Many art buyers are minimizing risk by opting for the best-known artists at the top end of the market with post-war and contemporary art performing strongly," it said.

That helped boost auction sales of post-war and contemporary art by five percent in 2012 to almost 4.5 billion euros and took that sector's overall market share to 43 percent.

Modern art was the next biggest sector with auction sales of 3.2 billion euros, representing 30 percent of the fine art auction market but a fall of 17 percent from its 2011 peak of 3.8 billion.

Private retail and dealer sales, as opposed to the auction room, fell four percent to 22.2 billion euros, with the lower end of the market recording the weakest performance.

Several art analysts have voiced concerns over what they say is a growing divide between the top end of the market, where ultra-wealthy buyers snap up rare treasures for staggering sums, and mid- to lower-tier sales which have been more susceptible to broader economic pressures.

(Reporting by Mike Collett-White, Editing by Belinda Goldsmith)

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SYDNEY | Tue Mar 12, 2013 10:17am EDT

SYDNEY (Reuters) - When Henri de Toulouse-Lautrec sketched his celebrated portraits of the Parisian demi-monde, even he could never have imagined his work would one day be displayed to new admirers amid the scorching heat and gum trees of faraway Australia.

"Paris & the Moulin Rouge," at the National Gallery of Australia in Canberra, the nation's capital, is unusual in that it marks the first time Australians have been treated to a full range of Lautrec's work.

The 110 pieces on display are the result of more than three years of work. Considered one of the most influential Post-Impressionists, Lautrec captured the multifaceted nature of the bohemian Parisian night life of the 1890's with which he surrounded himself.

"The national gallery is always looking to do something different. We haven't done some nice French nineteenth-century art so we decided now was the time," said assistant curator Simeran Maxwell.

"There has been a previous exhibition, but it was only on his prints. This is the first complete retrospective of paintings, prints, drawings, etcetera."

The collection, made up of works from European and U.S. institutions including the Musee D'Orsay, the British Museum, New York's Museum of Modern Art and various private collections, includes one painting from Australia.

Lautrec adapted an unconventional style with his portraits, taking unusual points of view and with asymmetrical compositions of figures, which he would cut off or place at the front of the picture plane, almost in the viewer's space.

One example of this is "Justine Dieuhl: Woman in a Garden 1891," where her swept-up hairstyle is so high and complicated that it barely fits into the painting.

There are also ample demonstrations of Lautrec's obsession with red headed women, such as "The Redhead With a White Blouse," and his fixation on the dance halls of the Moulin Rouge and brothels of the Paris of his time.

The variety of the exhibit is particularly critical, Maxwell said, since it was a good chance to show people that Lautrec was much more than his famous posters and why he produced "these amazing images."

There is the rarity factor as well, she added. "He painted on cardboard and the test of time has not done wonderful things for cardboard so they are quite fragile."

Sue Brodie, a visitor to the exhibition, said she particularly loved Lautrec and was impressed to see that "it's not just about his posters."

"I didn't know a lot about his drawing," she added. "They are so realistic they really capture the character of the person he's drawing. I wasn't expecting that so much."

The exhibition runs until April 2, 2013.

(Reporting by Pauline Askin, editing by Elaine Lies)

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Fri Mar 15, 2013 7:32pm EDT

n">(Reuters) - BP launched its promised appeal against "fictitious" and "absurd" oil spill compensation payouts on Friday and asked a judge to temporarily halt to those made on a so-called business economic loss basis.

In a New Orleans court filing, BP gave examples of businesses in industries far from the spill and unconnected with the coastline that enjoyed strengthened earnings in the spill year of 2010 and yet had received millions in spill compensation.

The British oil and gas group, which has already sold a substantial part of its business to pay reparations and fines for the disaster, said it could be "irreparably harmed" by the payouts without relief from the court, because they could cost it "billions" more than it budgeted for when it agreed to a settlement in April 2012.

BP was appealing a March 5 ruling, which upheld the way the compensation was being paid to business claimants wanting recompense.

The ruling, by the same U.S. District Judge Carl Barbier who presides over BP's ongoing trial on separate civil charges, reopened a part of the saga that appeared to have been settled almost a year ago when BP agreed terms on economic, property and medical compensation for more than 100,000 individuals and businesses who had filed a class action suit.

At the time of the settlement, BP estimated the bill would be $7.8 billion - already making it one of the biggest settlements of its kind in U.S. history.

For a graphic of BP's oil spill costs: link.reuters.com/nen26t

The actual amount is uncapped, and dependent on decisions made by Patrick Juneau, a lawyer from Louisiana who administers the payments under a complex set of rules set out by the agreement.

As the payments started to flow out, BP realized that the funds it had set aside would be insufficient. At first, it added more, reaching $8.5 billion by the end of 2012, while complaining that the payments to businesses were too generous and the terms of the settlement were being misinterpreted.

On March 5, Judge Barbier upheld Juneau's methods.

Two days later, BP said it would appeal, and it reduced the sum earmarked for payments back to $7.7 billion to underline its disapproval.

"The BEL (Business Economic Losses) policy decisions rewrite the agreement's express terms, and contradict its purpose, plain text, and underlying principles by authorizing compensation awards for claimants seeking to recover for non-existent 'losses.'" BP's Friday filing said.

"BP did not agree to pay what is already hundreds of millions of dollars, and potentially billions, to claimants with 'losses' that do not exist in reality, but result solely from the claims administrator's rewriting of the agreement."

The April 2010 spill happened when the Macondo well ruptured and the Deepwater Horizon rig that was working on it exploded and sank. The accident killed 11 men and spouted 4 million barrels of oil into the Gulf of Mexico in the United States' worst offshore oil spill.

"ABSURD" CLAIMS

In its filing, among the examples BP offered of "absurd" claims, the British company referred to a $21 million payment made to a rice mill in Louisiana situated some 40 miles from the coast that earned more revenue than in spill year of 2010 than in 2007, 2008, or 2009.

It also cited a $9.7 million recompense for a highway, street and bridge construction company in northern Alabama, almost 200 miles from the Gulf, and which does no business in the region, and for which 2010 was its best year on record.

BP also referred to a digital printing business and a law firm that had been compensated despite strong profits.

All were unnamed.

Lawyers for the Plaintiff Steering Committee (PSC), with which BP agreed the settlement, and which is a plaintiff in the ongoing trial along with the Department of Justice, said BP had no case for appeal.

"This court has already affirmed Mr. Juneau's independent interpretation of the settlement agreement..., terms which were negotiated, co-authored and expressly agreed to by BP," said co-lead counsels Steve Herman and Jim Roy.

"Simply put, BP undervalued the settlement and underestimated the number of people and businesses that qualify under the objective formulas that BP agreed to."

Yet Internet advertisements from lawyers boast of the ease with which payments far in excess of actual losses can be obtained.

One describes the experience of a Florida bicycle retailer it represented. The shop enjoyed an increase in spill year revenue to $2.5 million from $1.9 million in 2009, and yet managed to win a payout of "almost one million dollars," the advertisement says.

Another explains how under one of the tests involved, claimants can demonstrate a loss by choosing to compare "any consecutive three months from 2010" with "a large combination of months going back to January 2007."

BP's appeal covers just one area of a raft of costs and potential costs it faces as the third anniversary of the spill approaches on April 20.

Its accounting provisions for the spill total around $42 billion - equivalent to about 30 percent of its stock market value. Almost matching that it has sold assets worth $38 billion to finance compensation, clean-ups and fines, and it has paid, or committed to pay, $37 billion. The actions have sliced $5 billion a year, or 14 percent, off its cash flow - a basic measure of its ability to make money.

Some $4 billion in criminal claims - which are capped - have been settled, and are included in the above amounts, but civil claims under the Clean Water Act covered by the trial that began in February could add another $17.5 billion.

Billions more could be piled on in economic damage claims from Gulf Coast states. A third set of claims, for natural resource damage, have yet to be quantified.

(Reporting By Andrew Callus in London; Additional reporting by Jonathan Stempel in New York and Kristen Hays in Houston; Editing by Leslie Adler)

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