BP rose in London trading after agreeing to sell oil and gas fields in the US, Canada and Egypt to Apache Corp for $7 billion, raising cash to meet the costs of the Gulf of Mexico spill.
BP climbed as much as 4 per cent and traded at 402.65 pence as of 10.20am. The stock is down 39 per cent since the Deepwater Horizon rig exploded on April 20th, killing 11 workers and triggering the worst oil spill in US history.
Europe's largest oil producer by volume said last month it would sell $10 billion of assets to raise cash for the $20 billion fund demanded by US president Barack Obama to compensate victims of the oil spill.
BP said yesterday that it plans to sell assets in Pakistan and Vietnam, and the company was said to be in talks with Apache earlier this week about selling half its stake in Alaska's Prudhoe Bay oil field.
"It's a nice tidying up of the portfolio," said Iain Armstrong, an analyst at Brewin Dolphin Ltd., which overseas more than $31 billion in London, including BP shares. "If they can get rid of Vietnam and Pakistan assets as well, even better."
Apache will buy BP's Permian Basin holdings in Texas and southeast New Mexico and gas properties in western Canada, London-based BP said yesterday after the close of trading. BP also agreed to sell exploration concessions in Egypt. Cash Deposit BP said Apache will pay a deposit of $5 billion in cash on July 30th.
The total price of $7 billion includes $3.1 billion for the Permian properties, $3.25 billion for assets in western Canada and $650 million for the Egyptian assets, according to BP's statement.
The Prudhoe Bay stake was on track to be sold for $10 billion to $11 billion, according to a person with knowledge of the matter.
Jason Kenney, an analyst at ING Wholesale Banking in Edinburgh, values BP's assets in Vietnam and Pakistan at about $1.7 billion altogether. BP suspended its $10 billion annual dividend for three quarters and cut investment spending to help pay for spill costs, which Brewin Dolphin's Armstrong predicts will reach $40 billion. BP reports second-quarter earnings July 27th.
It was reported today that BP chief executive Tony Hayward is to step down within the next 10 weeks. Mr Hayward has been under pressure to resign as the British-based company battles to contain an oil spill in the Gulf of Mexico.
There is a growing expectation that Mr Hayward would announce his departure in late August or September, the Times said, citing sources close to the company.
Robert Dudley, chief of BP's Gulf Coast restoration efforts, is viewed as the front-runner to replace Mr Hayward, The Times said.
BP officials were not immediately available for comment.
BP said last month that Mr Hayward, criticised for his response to the disaster that started on April 20th, was still CEO with no change under discussion.
Bloomberg, Reuters