Just 24 hours after gaffe-prone Chief Executive Tony Hayward’s head rolled from the chopping block, candidates for the auction block hit the headlines, as BP aims to slim down to recover from the thumping losses racked up in the 100 days since the start of the environmental disaster.
Sources with direct knowledge of the matter said BP was in talks with India’s Reliance Industries and Essar to sell retail assets in Africa with an estimated price tag of $500 million. Its Indonesian unit rushed to pre-empt speculation its assets there might be for sale. “In Indonesia, there is no change to our strategy and plans. Indonesia is an important area for BP,” The company’s Indonesia president, William Lin, told Reuters. Investment bankers said the assets BP could sell include its stake in Alaska’s huge Prudhoe Bay oil field and its interest in Pan American Energy in Argentina, as well as smaller assets in Vietnam, Pakistan and Colombia.
Lawsuits
More than 5 million barrels of oil have spilt into the Gulf of Mexico since the undersea leak began in late April, according to U.S. government estimates. The spill, caused by an explosion that killed 11 people, has devastated communities and fragile ecosystems along the Gulf Coast and killed or injured countless sea creatures and coastal birds. It has also prompted a moratorium on deepwater oil drilling. The leak was plugged two weeks ago, and later on Wednesday BP is scheduled to provide an update on when it could begin the final procedure to permanently seal the well. With private lawsuits piling up, attorneys hoping to lead the fight against BP are heading to Boise, Idaho, as a special panel considers how to handle the cases.
A group of seven federal judges is convening on Thursday to consider which court, or courts, should oversee the hundreds of spill-related civil suits brought by injured rig workers, fishermen, investors and property owners. The list of investigations surrounding the spill is also growing. The Washington Post said several government agencies were preparing a criminal probe of the action of at least three companies involved in the spill, citing law enforcement and other sources. The U.S. Securities and Exchange Commission and Department of Justice have also launched “informal enquiries” into securities matters related to the spill.
BP shares down
BP’s London-listed shares were down 1.7 percent at 399.1 pence at 1:54pm, as investors digested Tuesday’s news of a second-quarter loss of $17 billion, including $32 billion in charges related to the oil spill. The company has lost about 40 percent of its market value since the explosion. “The critical question remains what BP will look like two years from now,” analysts at Morgan Stanley said. “Investors will need more clarity on the impact of asset sales and further reassurances of a cultural change regarding safety ... before BP can regain a multiple in line with its industry peers.”
Industry executives said it was a good time to sell assets as relative stability in the oil price in the past nine months makes it easier for buyers and sellers to agree terms. BP agreed to a $7 billion sale of oil and gas fields to Apache Corp last week, which valued the assets at around $19.40 per barrel of oil equivalent. Bob Dudley, who will replace Hayward as CEO on October 1, on Tuesday called the Gulf oil spill a “wake-up call” for the entire industry and said safety would be among his top priorities as the first American to lead BP tries to patch up the British oil company’s battered reputation. Image repair wasn’t helped when BP pointed out the cost of the spill would reduce its taxes, leaving U.S. taxpayers $10 billion worse off.
Source:© Copyright 234Next
|
