The Weekly Wrap: July 16, 2010
Could BP go Chinese? After BP CEO Tony Hayward jetted around the Middle East last week looking for new investment to boost BP’s liquidity, PetroChina indicated that it would "welcome" any offers to invest in the embattled oil major. China’s national oil companies have been eager to expand their energy investments abroad, and cooperating more ...
Could BP go Chinese? After BP CEO Tony Hayward jetted around the Middle East last week looking for new investment to boost BP's liquidity, PetroChina indicated that it would "welcome" any offers to invest in the embattled oil major. China's national oil companies have been eager to expand their energy investments abroad, and cooperating more closely with BP or acquiring some of its assets are two potential ways to do it. BP's apparent willingness to sell off some of its assets has also been welcomed by China's CNOOC, Ltd., which has expressed an interest in acquiring BP's 60% stake in Argentina's Pan American Energy.
Could BP go Chinese? After BP CEO Tony Hayward jetted around the Middle East last week looking for new investment to boost BP’s liquidity, PetroChina indicated that it would "welcome" any offers to invest in the embattled oil major. China’s national oil companies have been eager to expand their energy investments abroad, and cooperating more closely with BP or acquiring some of its assets are two potential ways to do it. BP’s apparent willingness to sell off some of its assets has also been welcomed by China’s CNOOC, Ltd., which has expressed an interest in acquiring BP’s 60% stake in Argentina’s Pan American Energy.
BP’s asset emporium. The Chinese aren’t BP’s only eager suitors. As the company tries to raise $10 billion in asset sales to cover the costs of its Gulf-related liabilities, Apache Corporation is close to reaching a deal with the energy giant to acquire some major assets in Alaska. But what else might be on the auction block at BP? As this interactive feature shows, the "non-core assets" identified by BP range from Angola to the North Sea, and Australia to Canada.
Nigerian national oil company declares insolvency. The Nigerian National Petroleum Corp., which administers Nigeria’s vast oil reserves, was declared insolvent by Nigerian finance minister Remi Babalola this week. According to Babalola, the company needs some $6.6 billion to recoup its costs. The revelation comes after widespread cases of corruption within both the Nigerian oil ministry and the national oil company. While possessing the richest oil reserves in Africa, Nigeria has long struggled to manage its mineral wealth, and actually imports some 85 percent of the refined fuel used by its population.
Congress turns up the heat on BP. An amendment sponsored by U.S. Rep. George Miller (D-Calif.) passed the House Committee on Natural Resources on Wednesday. The proposed Miller amendment, which is part of broader oil-rig safety legislation currently navigating its way through Congress, could effectively prevent BP from acquiring future U.S. oil leases on account of its poor safety record. Whether the amendment comes before the full House, however, depends on whether congressional leaders decide to tackle a broader energy bill before the midterm elections this November.
BP complicates British-American relations, again. In the wake of revelations about BP’s apparent influence on the release of Lockerbie bomber Abdel Basset Al-Megrahi by a Scottish court last year, the Senate Foreign Relations Committee has announced a hearing on July 29 to investigate the incident. The British ambassador to the United States has branded the allegations of involvement by BP, which had oil interests in Libya, as "inaccuracies… harmful to the U.K." After the public vilification of Hayward and charges of anti-British sentiment in the United States in the wake of the Gulf spill, Prime Minister David Cameron’s visit with President Obama next week should be interesting.
Why drilling in the Gulf of Mexico will recover. It’s easy to think that deepwater projects in the Gulf will be limited for the foreseeable future. Think again, says RigZone, an industry publication. Given the American market’s strong reliance on Gulf oil production, the established investments of producers in the region, and sustained strong oil prices, it’s likely that offshore activity in the Gulf will rebound once the atmosphere becomes less politicized.
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