BP holders deny seeking investors
By Raji Menon and Eman Goma |
July 6, 2010, Tuesday
|
Print Edition
Print Edition
SHAREHOLDERS in British oil company BP yesterday balked at reports it would seek urgent investment from a wealthy Middle East or Asian country as clean-up costs for its United States oil spill topped US$3 billion.
Over the weekend, while US Independence Day holiday makers shunned Gulf of Mexico beaches tarred by the leaking well, media reports said BP was looking for a strategic investor among the sovereign wealth funds of the Middle East and Asia.
An investor would help ward off a takeover and raise funds for liabilities mounting behind the worst oil spill in US history, the reports said.
BP shares rose 2.4 percent in London to 329.65 pence (US$5) in early morning trade after the reports, but some shareholders balked at the idea of a strategic investor.
"We don't think a strategic partner is at all necessary," said one top-10 BP shareholder who did not want to be named. "We think this is just people trying to panic the company and stampede into doing something to earn huge fees from selling new shares in BP. Shareholders will be saying 'No, thank you' to this and we have communicated this to the company."
Another top-10 investor agreed that BP "probably did not" need a strategic investor at the moment.
Britain's Sunday Times said BP's advisers were trying to drum up interest among rival oil groups and sovereign wealth funds to take 5 or 10 percent stakes in the company at up to 6 billion pounds. BP declined to comment.
Separately, several newspapers reported interest among sovereign wealth funds in buying some of BP's assets in the Middle East and Asia. BP has said it hopes to raise US$10 billion from asset sales this year as part of its plan to fund a US$20 billion clean-up fund set up under pressure from US authorities.
BP shares have lost more than half their market value since the worst US oil spill in history struck on April 20, the result of an explosion on a drilling rig that caused a well to rupture and spew millions of gallons of crude into the sea.
Attempts to stop the flow have been unsuccessful, with BP now pinning hopes on a relief well that should be complete in August.
Some oil is being captured through a pipe, while some is being burned off. BP said it collected or burned 25,195 barrels on Saturday but estimates of the total amount flowing go as high as 100,000 barrels.
BP said yesterday it had so far spent US$3.12 billion on the response effort, including US$147 million in claims to those affected. Plans are being developed for additional containment capacity.
Over the weekend, while US Independence Day holiday makers shunned Gulf of Mexico beaches tarred by the leaking well, media reports said BP was looking for a strategic investor among the sovereign wealth funds of the Middle East and Asia.
An investor would help ward off a takeover and raise funds for liabilities mounting behind the worst oil spill in US history, the reports said.
BP shares rose 2.4 percent in London to 329.65 pence (US$5) in early morning trade after the reports, but some shareholders balked at the idea of a strategic investor.
"We don't think a strategic partner is at all necessary," said one top-10 BP shareholder who did not want to be named. "We think this is just people trying to panic the company and stampede into doing something to earn huge fees from selling new shares in BP. Shareholders will be saying 'No, thank you' to this and we have communicated this to the company."
Another top-10 investor agreed that BP "probably did not" need a strategic investor at the moment.
Britain's Sunday Times said BP's advisers were trying to drum up interest among rival oil groups and sovereign wealth funds to take 5 or 10 percent stakes in the company at up to 6 billion pounds. BP declined to comment.
Separately, several newspapers reported interest among sovereign wealth funds in buying some of BP's assets in the Middle East and Asia. BP has said it hopes to raise US$10 billion from asset sales this year as part of its plan to fund a US$20 billion clean-up fund set up under pressure from US authorities.
BP shares have lost more than half their market value since the worst US oil spill in history struck on April 20, the result of an explosion on a drilling rig that caused a well to rupture and spew millions of gallons of crude into the sea.
Attempts to stop the flow have been unsuccessful, with BP now pinning hopes on a relief well that should be complete in August.
Some oil is being captured through a pipe, while some is being burned off. BP said it collected or burned 25,195 barrels on Saturday but estimates of the total amount flowing go as high as 100,000 barrels.
BP said yesterday it had so far spent US$3.12 billion on the response effort, including US$147 million in claims to those affected. Plans are being developed for additional containment capacity.
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