Jul 08 2010 |
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Speculation rife about BP strategy
Thursday, Jul 08, 2010
Gulf News
ceo’s abu dhabi visit fuels rumours of adia funding
Abu Dhabi The purpose of BP chief executive Tony Hayward’s latest trip to Abu Dhabi remained a matter of speculation yesterday amid media reports that the beleaguered UK-based oil and gas major is seeking support from Middle East investors and shareholders to stay afloat.
“Mr Hayward is visiting key business partners and BP staff in Abu Dhabi. We are not confirming who he is meeting as we don’t discuss the itinerary of our CEO,” Sheila Williams, a London-based spokesperson for BP , told Gulf News over the telephone.
Sovereign wealth funds in the Middle East are reportedly interested in buying BP stock after it lost half of its value since the start of the Gulf of Mexico oil spill.
No indications
Hayward left Abu Dhabi yesterday but gave little indication about the purpose of his visit.
“ BP is now looking to drum up investment support from the cash-rich sovereign wealth funds of oil-rich Gulf states such as the UAE, Qatar and Kuwait to secure a cash injection with entities that would allow it to retain its operational independence,” said Kate Dourian, Middle East Editor for Platts, a global energy information provider.
“ BP has its back against the wall, having lost half of the value of its shares, which translates into more than $90 billion, since the April 20 explosion on Transocean’s Deepwater Horizon rig at BP’s Macondo oil well, which killed 11 crew members and triggered the massive US Gulf of Mexico spill,” she added.
“The dramatic share price fall, driven by concerns over BP’s potential liabilities from the worst spill in US history, has fuelled speculation that the company may struggle to stay independent, with a possible takeover offer from rival oil major or national oil company,” said Dourian.
Hayward last month pledged to set aside $20 billion (Dh73.44 billion) to compensate spill victims and fund a massive cleanup operation. To pay for it, the company cancelled three quarters of its dividends and now plans to sell assets worldwide.
Enormous costs
BP has forked out some $3.12 billion in spill-related costs and has promised to pay another $20 billion into an escrow fund. Meanwhile, clean-up efforts in the Gulf of Mexico oil spill extended to Texas and Lake Pontchartrain, Louisiana.
Up to 60,000 barrels of oil a day are believed to be leaking into the Gulf of Mexico, far outpacing the collection efforts of a system that is capturing around 25,000 barrels a day.
See also Page 38
Bloomberg News
Tony Hayward
Mr Hayward is visiting key business partners and BP staff in Abu Dhabi. We are not confirming who he is meeting as we don’t discuss the itinerary.”
Sheila Williams
BP spokesperson
By Himendra Mohan Kumar?Staff Reporter
© Gulf News 2010. All rights reserved.
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