£8bn asset sell-off to help BP meet clean-up costs

Jul 12 2010 by Peter McCusker, The Journal

OIL giant BP is in talks over an £8bn asset sell-off to help meet the costs of tackling the Gulf of Mexico oil spill, it was reported yesterday.

The assets up for grabs in the firm’s talks with US rival Apache Corporation include a big stake in Alaska’s giant Prudhoe Bay oil field, the Sunday Times reports.

BP has been wrestling with the growing disaster in the Gulf since the Deepwater Horizon rig exploded and collapsed on April 20, killing 11 workers.

The deal with Apache would more than fulfil its target of raising £6.6bn from disposals and give some assurance to markets over its ability to tackle the costs. The sale of a stake in Prudhoe Bay – one of BP’s prize assets which produces 390,000 barrels of oil a day – would also give a huge boost to Apache.

Meanwhile the slump in the group’s share price since the crisis has also made it vulnerable to a takeover bid, with US giant ExxonMobil considering its options, the Sunday Times adds.

BP began work at the weekend on an improved containment cap over the damaged well, which will be able to collect more than 50,000 barrels of oil a day and improve the efficiency of the operation during the hurricane season.

The installation will take up to a week to complete.