BP boss in MidEast talks, weather hampers cleanup

  • World
  • Wednesday, 07 Jul 2010

Hayward, BP's chief executive, was also seen by Reuters with a senior official from another Abu Dhabi fund, and a report said Saudi investors were looking to buy 10 percent to 15 percent of the oil company.

A United Arab Emirates official said Hayward's visit with the officials from Abu Dhabi Investment Authority was a routine one scheduled to mainly discuss the British firm's concessions with Abu Dhabi National Oil Company.

"We are here to talk to our existing shareholders," a cheerful-looking Hayward told Reuters in the ornate, marble lobby of an Abu Dhabi office building before heading into a meeting, along with his six-man entourage.

But bankers say BP is on a marketing drive for its stock, whose price has fallen by half since its well blew out in April, spewing crude oil into the Gulf of Mexico and soiling the shores of every U.S. Gulf Coast state.

Hayward was in Azerbaijan on Tuesday.

On Wednesday, BP's shares on the New York Stock Exchange were up nearly 3 percent, buoyed for a second day on investor relief that the company said it does not plan to isssue new equity, and analysts' increasing confidence the worst is behind what they see as an underpriced energy giant.

"With the CEO in Abu Dhabi speaking to the sovereign wealth fund to get some investment it's not surprising that there is some enthusiasm in the market for BP shares," said Mic Mills, head of electronic trading at London-based ETX Capital.


Progress on the relief well seen as the best hope for finally stopping the 79-day-old disaster also lifted investor hearts. U.S. officials said it was a week ahead of schedule, although still not expected to be finished before mid-August.

The spill is wreaking havoc on coastal ecosystems, killing birds, sea turtles and dolphins and risking multibillion-dollar fishing and tourist industries at a time of high unemployment. As a result, it sits atop U.S. President Barack Obama's crowded domestic agenda and presents a tough test for his leadership.

On Thursday, the White House will go head-to-head with the oil industry in court over its effort to suspend deepwater oil drilling in the Gulf for six months in the wake of the BP blowout.

The administration says the moratorium is necessary to make sure deepwater drilling can be conducted safely. The industry calls it an unnecessary infringement on its business that costs jobs.

For full spill coverage http://link.reuters.com/hed87k

Insider TV http://link.reuters.com/ned73m

Graphics http://r.reuters.com/qam39k

A third vessel at the leak site that should more than double BP's oil-capture capacity to 53,000 barrels a day from around 25,000 is now partially hooked up, but rough seas hamper efforts to finish the job. Estimates of the leak's severity vary widely and run as high as a 100,000 barrels per day.

Storms and rain in the Gulf region have also displaced protective booms aimed at keeping the oil from the coastline and spread the oily muck into new places.

"The weather's made it difficult for the clean up operations to go full force. The strike force teams have been working as frequently but the weather has been hampering the whole clean-up effort," said Kurt Fromherz, spokesman for Plaquemines Parish in Louisiana, which stands at the epicenter of coastal oil spill damage.

Pushed by the Obama administration, BP has committed to a $20 billion fund for clean-up and other costs stemming from the spill. Its costs to date have topped $3 billion.

The final cost will depend on how much crude eventually pours from the well, which blew when a rig exploded on April 20, killing 11 workers.


BP executives have held talks with sovereign wealth funds in Abu Dhabi, Kuwait, Qatar and Singapore, seeking a partner that might help it avoid being taken over, a UAE source said.

Abu Dhabi's International Petroleum Investment Company (IPIC), was not interested in buying a BP stake, a company source said. IPIC invests in global oil and gas assets.

A spokesman for ADIA declined to comment.

Sovereign funds holding BP stakes include Norway and Kuwait, with about 1.8 percent each, China owns 1.1 percent and Singapore 0.7 percent, according to Thomson Reuters data.

Hayward's meeting in Abu Dhabi concerns an oil concession that dates back to 1939 and is due to expire in 2014. BP is a minority stakeholder in Abu Dhabi Company for Onshore Oil Operations. Talks on renewal have been going on for years. (Additional reporting by Matthew Bigg in Myrtle Grove, Louisiana, Leigh Coleman in Biloxi, Mississippi, Sarah Young in London, Stanley Carvalho in Abu Dhabi and Shaheen Pasha in Dubai; writing by Patricia Zengerle; editing by Kristin Roberts and Jerry Norton)

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