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BP announces asset sales
July 20, 2010 / 1:59 AM / in 7 years

BP announces asset sales

HOUSTON/WASHINGTON (Reuters) - British energy giant BP Plc said on Tuesday it reached a $7 billion deal with Apache Corp, a large part of its planned sale of $10 billion in assets to pay for the worst oil spill in U.S. history.

<p>The new containment capping stack is pictured in this image captured from a BP live video feed from the Gulf of Mexico, July 20, 2010. REUTERS/BP/Handout</p>

BP said Apache would pay a $5 billion cash deposit on July 30 as part of the deal for exploration and production facilities in North America and Egypt. The company said the deal, worth a total of $7 billion, would include assets in New Mexico, natural gas in western Canada and concessions in Egypt.

BP’s share price ended 1.54 percent lower in New York on Tuesday at $35.20. Earlier in the day, it announced it would sell $1.7 billion worth of assets in Vietnam and Pakistan.

The continuing disaster in the Gulf remains high on the American and British political agendas and dominated a visit to Washington by British Prime Minister David Cameron.

Cameron praised BP for the steps it has taken to plug the leak and to pay for damages suffered by people in the Gulf. U.S. officials on Tuesday gave BP’s latest effort -- a cap that has stopped the gusher -- another 24 hours for pressure tests on the seal.

The Gulf’s vital tourism and fishing industries have been devastated by the millions of gallons of oil that have hit coastal beaches and marshes, threatening an ecological catastrophe on a grand scale. The spill also has hurt President Barack Obama’s approval ratings and complicated traditionally close ties with Britain.

Rig operator Ensco Plc filed a lawsuit on Tuesday challenging the Obama administration’s new deepwater oil drilling moratorium, saying it was mostly the same as the first ban that a U.S. court already put on hold.

Ensco, in a complaint filed with the U.S. District Court for the Eastern District of Louisiana, said the Interior Department “did not analyze the situation anew and with an open mind when deciding to impose the second moratorium.”

The BP asset sales were announced exactly three months after an explosion on an offshore rig killed 11 workers and caused the crude to flow into the Gulf of Mexico.

BP has committed to raise $10 billion in the coming year to pay for damage claims, the cleanup and legal costs related to the leaking well.

<p>Plaquemines Parish Coastal Zone Director P. J. Hahan holds a tri-colored heron after spotting the seriously oiled bird along Queen Bess Island near Grand Isle, Louisiana July 17, 2010. REUTERS/Sean Gardner</p>

BP, which said on Monday it had spent about $3.95 billion so far on the oil spill, agreed under intense pressure from U.S. authorities last month to set up an independently administered $20 billion escrow fund for damage claims.

The Obama administration has stressed that the amount is not a cap on the company’s liabilities.

During a visit with Obama, Cameron said he understood U.S. anger at BP because of the oil spill. He also said it was important to both the U.S. and British economies that the company stay strong and stable.

Slideshow (7 Images)


The U.S. government on Tuesday approved another 24-hour extension of a pressure test of the well.

The broken well was capped last week -- at least temporarily -- after spilling up to 60,000 barrels a day of crude for three months.

The well test, which has been extended in 24-hour increments by the U.S. government, will continue until Wednesday afternoon and then be re-evaluated for a possible further extension.

Scientists are now weighing another option -- a “static kill” to help smother and plug the leak.

The top U.S. oil spill official said BP could have a plan to proceed with the static kill option within 24 hours.

This would involve pumping heavy drilling mud and possibly cement into the well, much like BP’s failed “top kill” in May.

Additional reporting by Doina Chiacu and Tabassum Zakaria in Washington, Matthew Lynley in New York, Kristen Hays and Chris Baltimore in Houston; Writing by Deborah Charles and Sitaraman Shankar; Editing by Ed Stoddard and Bill Trott

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