LONDON (Dow Jones Newswires), July 20, 2010
BP will sell its gas fields and gas pipeline in Vietnam, as well as assets and exploration licenses in Pakistan, as part of its effort to cover the cost of the Gulf of Mexico oil spill, a spokesman for the company said Tuesday.
Neither country is a core area for BP--the two combined accounted for just more than 2% of the company's total natural gas output last year. ING analyst Jason Kenney estimates BP could raise about $1.7 billion pulling out of both countries.
"I think the point is that they have a lot of assets that are considered peripheral (to BP) but that could be of interest to other people," Kenney said.
BP last month said it would divest about $10 billion in assets over the next year as it looks to shore up its balance sheet against costs related to the Gulf spill. It hasn't yet announced any deals.
A BP spokesman said BP's lubricant business In Pakistan isn't for sale. The company hopes to have sold the Pakistan assets by the end of the year, but the spokesman wasn't sure of the timetable for the Vietnam assets.
"We have talked to the government and staff," about the plans to sell the gas fields, which feed a power station that supplies a significant proportion of Vietnam's electricity, he said. "We will now start looking for buyers and they will start looking for us," he said.
He declined to comment on whether other assets mentioned in the press, including Alaska, Colombia and Venezuela, are up for sale.
BP appears to have put the worst of the Gulf of Mexico oil spill behind it after stopping the flow of oil last week. But the company still faces massive challenges to clean up spoiled waters and pay for liabilities since the April 20 explosion on the Deepwater Horizon drilling rig that triggered the spill.
BP Monday said the cost of the response to date was about $3.95 billion, including the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid and federal costs.
The company last month agreed to pay $20 billion over the next three and a half years into a cleanup and compensation fund for the Gulf of Mexico oil spill, but it still doesn't know what the final tab will be.
"It is too early to quantify other potential costs and liabilities associated with the incident," BP said Monday.
BP Tuesday said well integrity tests were ongoing, and that no oil was flowing into the Gulf. Still, government officials are worried that oil and gas could be escaping elsewhere.
As of Monday, pressure tests had been inconclusive, but BP said the reservoir has depleted to the point where the company could use a new method of closing off the well by pumping heavy drilling fluid into the top--an operation similar to the "top kill" procedure that failed in May.
If successful, the procedure could kill the well permanently more quickly than the relief wells that BP is drilling, which have long been seen as the only permanent solution to one of the worst-ever environmental disasters in the U.S.
BP's shares closed flat on the day in London, but are still down almost 41% since the April 20 accident.
Copyright (c) 2010 Dow Jones & Company, Inc.
Most Popular Articles
From the Career Center
Jobs that may interest you