How will BP’s asset sales affect the company?
TEXT OF INTERVIEW
Steve Chiotakis: British oil giant BP is paying an enormous amount of money to clean up and compensate those affected by the disaster, the oil gusher in the Gulf of Mexico. It’s now looking for ways to pay and find that money to pay those costs by selling some of its assets.
The BBC’s Rebecca Singer is with us from London with the latest. Good morning Rebecca.
Rebecca Singer: Good morning.
Chiotakis: So what has BP sold?
Singer: Well, they’ve agreed to sell a range of oil and gas fields in Texas, southwest New Mexico, western Canada and even Egypt. Now they’re selling them to a U.S. company called Apache. And they’ve been referred to as mature fields — basically, BP reckons they’re past their peak. But actually, Apache is well-known for buying up these types of fields and boosting their production.
Chiotakis: And how valuable, Rebecca, were these fields, these assets to BP’s future growth?
Singer: Well, by no means are these core assets, and their sale doesn’t represent a major restructuring of the company in any way. And even $10 billion isn’t a huge amount for BP. But Robert Talbot who is the chief investment officer at Royal London Asset Management, now they’re one of BP’s major shareholders, he admitted that this was a forced sale to some extent, and because of the Gulf of Mexico spill, BP wouldn’t have got the best price.
Robert Talbot: Their negotiating position was probably a lot less strong that it would’ve been six months ago. It wasn’t a great hand to play actually, but I think the price is reasonable, but it’s not as good as you might have expected.
Singer: Now, some analysts have been surprised at how quickly they’ve done this sale, although they did announce it a couple of weeks ago, but they do still need government regulatory approvals before they can be completed.
Chiotakis: The BBC’s Rebecca Singer reporting from London for Marketplace. Rebecca, thanks.
Singer: You’re welcome.
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