* U.S. court finds BP "grossly negligent" over 2010 spill
* BP seen able to meet potential extra $18 bln in fines
* New costs could encourage BP to reduce Russia exposure
(Adds broader potential asset sales, Rosneft dividend)
By Dmitry Zhdannikov and Ron Bousso
LONDON, Sept 5 The prospect of up to $18 billion
in new fines for the 2010 Gulf of Mexico oil spill could
pressure BP to sell assets from the Americas to Asia and
Russia, where its interests risk being dragged into a political
standoff between Moscow and the West.
Shares in the British oil group plunged on Thursday after a
U.S. judge ruled the company was "grossly negligent" for the rig
blast and spill that killed 11 workers in the worst offshore
environmental disaster in U.S. history.
On Friday, while cautioning that the level of fines may not
be determined for years and will be appealed, some analysts said
the bad news could prompt BP to look at reducing its exposure.
"I wouldn't be surprised due to the ongoing crisis in
Ukraine and Russia if BP would like to reduce its huge 19.75
percent stake in the BP-Rosneft joint venture to cut their risks
there, even though it is profit making," said Natixis analyst
BP's assets in Russia generate up to a quarter of its global
production and the company has said it remains firmly committed
to them despite the crisis in Ukraine, where separatists are
being supported by Moscow. The West has imposed economic
sanctions on Russia and Moscow has countered with its own
BP declined to comment on Friday about assets sales.
Citi analysts called BP's Russian exposure an "overhang" and
said that and the increasing costs of spill cleanup explained
why BP's shares are valued less than its peers.
Deshpande said a reduction of BP's Russian exposure would
not be easy and buyers were limited. They could include China,
if cleared by the Kremlin, or Rosneft itself, he said, though
the state-owned company is struggling because of sanctions.
BP has already divested around $50 billion of assets in
recent years, slimming down to focus its growth on the Gulf of
Mexico, Russia, Angola and the Caspian Sea.
Investors have demanded oil majors cut high costs and, after
the ruling, BP may "look to extend the divestment program to
cover an increase in fines," wrote Bernstein Research analysts.
Potential sales targets include BP's 17 percent interest in
the North West Shelf LNG project in Australia valued at $7.8
billion; its stakes in the Valhall and Skarv oilfields in Norway
at a combined valuation of $4 billion and the Itaipu offshore
project in Brazil for $1.3 billion, according to Bernstein.
Bernstein also valued BP's stakes in the Azerbaijan BTC
pipeline at $2.3 billion; the In Salah field of Algeria at $1.3
billion, and its Rumaila Iran asset at less than $1 billion.
In the United States, BP's U.S. shale unit has so far failed
to deliver and the Mad Dog 2 platform in the Gulf of Mexico was
put on standby in 2013 because of cost concerns.
In Alaska, BP is a partner in a natural gas project that
could cost $45 to 65 billion.
BP has set aside $42 billion for cleanup, compensation and
damages arising from the April 20, 2010 disaster in the Gulf of
Mexico, including $3.5 billion for fines under the Clean Water
Thursday's ruling could make BP liable for up to $17.6
billion in fines if an appeal fails, potentially leaving it with
a significant shortfall. The maximum fine under a simple
"negligence" ruling would have been $4.5 billion.
"This decision represents another step in the process, but
there is a long way to go in resolving this issue," BP chief
executive Bob Dudley wrote to employees in an internal memo,
seen by Reuters.
BP's stock was up around 2.4 percent on Friday, as analysts
played down the immediate impact on the company.
"A lengthy appeals process reduces the net present value of
the fine. We note that Exxon took almost 20 years to settle the
1989 Valdez spill," said analysts from Investec.
Penalties based on how many million barrels spilled will be
assigned after the next phase of a civil trial over the
accident, scheduled for January 2015.
Citi said it was raising its rating on BP shares to "buy"
from "neutral" following Thursday's drop, and S&P also said it
was maintaining its "buy" recommendation. The stock is down 30
percent since before the 2010 spill.
The ruling is unlikely to have much impact on BP's dividend
payments in the near term, as it had $27.5 billion in cash and
equivalents at the end of the second quarter.
"We believe the financial implications of this ruling will
remain significantly below the maximum - the Citi estimate is
$8.2 billion - a sum that should not impact on BP's ability to
fund future growth ambitions nor shareholder dividends," Citi
said in a note.
But the $690 million annual divided BP received from Rosneft
in July is less certain going forward, Gimme Credit analyst
Philip Adams said, as Rosneft has asked the Russian government
for $42 billion in help to weather sanctions.
After the spill, the U.S. government barred BP from new work
in the Gulf of Mexico and new contracts to supply fuel to the
military. The ban was lifted in March. It is not clear if the
court's ruling could change that.
"I'm not buying BP here. The ruling opens up the door in the
United States to more fines for BP," said Beaufort Securities
sales trader Basil Petrides.
(Reporting by Ron Bousso, Dima Zhdannikov and Sudip Kar-Gupta
in London and Anna Driver in Houston; Editing by Mark Potter and