Wednesday, July 14, 2010

UK says it won't rescue BP; U.S. says it won't stop ExxonMobil or Chevron from buying the rogue company

LONDON - BP is negotiating to sell $12 billion worth of holdings, including some in Alaska, mainly to Apache, as it braces for a possible takeover attempt by Exxon Mobil Corp. or Chevron, according to media reports.
A deal with Apache, an independent oil and gas company known for its numerous acquisitions, would go a long way toward securing the money BP has pledged to put toward the cleanup costs. The two companies have struck deals together in the past, including BP’s sale of 18 Gulf of Mexico oil fields to Apache in 2006.
Some analysts have estimated that BP’s total liability may rise to $70 billion.
Among the assets that may be sold is BP’s 26 percent stake in the Prudhoe Bay field in Alaska’s North Slope, the largest oil field in North America.
BP’s chief executive, Tony Hayward, has been traveling around the world to bolster support from major stakeholders.
BP has already said that it will sell about $10 billion worth of assets as part of its financing strategy. It has already suspended its dividend to help conserve about $8 billion in cash, and plans to cut capital spending by several billion dollars. The company has been lining up financing from a group of banks as well, though it has also said it does not plan to issue new equity to potential new investors.
The company is also considering asset sales elsewhere in the world, including Vietnam and Algeria, according to another person briefed on the matter.
The U.S. Department of Justice has already asked BP for advance notice of major asset sales or cash transfers.
Oil-industry sources said the White House gave assurance that it wouldn't block either ExxonMobil or Chevron from trying to take over or merge with BP.
BP said it will use its second-quarter earnings call on July 27 to unveil a plan to amass $40 billion in funds.
Meanwhile, a British official has indicated that oil companies pursuing a deal with BP would not encounter opposition from the government.
"Takeovers and mergers are commercial matters for companies," said a spokesman for the Department for Business, Innovation and Skills.
Anadarko Petroleum has informed BP that it is holding back payments for costs related to the Gulf of Mexico oil spill, said spokesman John Christiansen. But Anadarko, which owns a 25 percent stake in the ruptured well, is in discussions with BP to try to come to an agreement, he added.

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