Abandon Ship! BP ‘accelerating’ Asset Sales (in anticipation of bankruptcy?)
July 17, 2010 Leave a comment
British energy giant BP is speeding up the sale of up to 20 billion dollars (15.5 billion euros) of assets in a bid to boost funds after the Gulf oil spill, the Financial Times reported Friday.
The company is finalising details of the sales, including the disposal of American assets to Apache Corporation worth up to 12 billion dollars, said the paper, citing people close to the situation. Announcements are expected in the next few weeks and an unnamed senior BP figure said the company could “easily” raise 20 billion dollars from the asset sales, according to the report. This is double the amount the oil giant originally said it wanted to sell off when it announced plans to offload assets last month.
BP is seeking to build up a disaster fund of 20 billion dollars to cover the clean-up costs for the disastrous oil spill. The news came as BP said Thursday it had stopped oil flowing into the Gulf for the first time in three months and was beginning key tests hoping to stem the spill for good.
A sale to US oil and gas firm Apache would include a stake in Prudhoe Bay, the largest oil field in North America, according to reports. Apache has done smaller deals with its British rival in the past but acquiring a stake in Prudhoe Bay would be a major coup.
BP also wants to sell some or all of its 60-percent share in Pan American Energy of Argentina, valued at nine billion dollars, said the FT. A deal with Royal Dutch Shell to buy BP’s minority stake in the Mars field in the Gulf of Mexico is also on the cards, added the paper.
The Gulf oil spill, the worst environmental disaster in US history, started on April 20, with an explosion on the BP-leased Deepwater Horizon rig which sank two days later.
It has so far cost the company some 3.5 billion dollars and compensation claims from devastated residents of the region could reach 10 times that.