BP to Sell GOM Assets as it Focuses on Growth
by Jon Mainwaring
Tuesday, May 01, 2012
BP wants to sell its interests in what it describes as "non-strategic assets" in the Gulf of Mexico as part of its plan to focus its businesses worldwide on major assets and future growth opportunities.
Reflecting an increased focus on exploration, BP said it added significantly to its interests in promising South Atlantic equatorial margin plays during the quarter. The firm said it farmed in to four exploration concessions with Petrobras in Brazil, deepened its interests offshore Namibia and was awarded three new blocks offshore Uruguay. BP also gained access to the promising potentially liquids-rich Utica shale formations in Ohio, it added.
BP remains on track to start up six new major upstream projects in 2012, it said. These include Clochas-Mavacola in Angola and Galapagos in the Gulf of Mexico, both expected to start in the second quarter.
During the first quarter BP made an underlying replacement cost profit, adjusted for non-operating items and fair value accounting effects, of $4.8 billion. The figure (which is broadly comparable with net income under US accounting rules) was lower than the $5 billion earned by the firm in the previous quarter because of the adverse impact of a $541 million consolidation adjustment related to unrealized profits in inventory held within BP's downstream business.
"We have made a good start against our strategic priorities for 2012. During the quarter we gained access to significant new deepwater and US shale exploration acreage, our ongoing divestment programme has reached $23 billion, and we have five deepwater rigs at work in the Gulf of Mexico. This operational progress will underpin the financial momentum we expect to come through as we move into 2013 and 2014," said Group Chief Executive Bob Dudley.
During the quarter BP made payments of $1.5 billion into the $20 billion Trust that it set up in the wake of the Deepwater Horizon disaster. At the end of the quarter, BP had made total payments into the Trust of $16.6 billion and it expects its payments to end in Q4 2012.
At the end of Q1 2012, BP had paid a total of $8.3 billion in individual, business and government entity claims, advances and other payments. The firm also expects to pay a further $7.8 billion as settlement for private economic loss and medical claims stemming from the Deepwater Horizon accident and oil spill after it reached a definitive agreement with the Plaintiff's Steering Committee on April 18.
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