BP makes a move to cope up with compensation pays

Jul 22nd, 2010 Featured News, World. RSS 2.0.

BP 300x180 BP makes a move to cope up with compensation paysBP PLC announced that it would sell its assets for $7 billion to assist the payment cost for the damages in the Gulf of Mexico oil spill.

BP PLC will sell its assets in the U.S., Egypt, and Canada to Apache Corp. Some of the profits will be going to a compensation fund implemented last month by President Barack Obama’s administration. This fund will be aiding any costs for the rehabilitation and damages in the oil spill in the Gulf of Mexico.

BP realized that they would likely be paying a huge sum of money for the damages of the oil spill caused by the ruptured Deepwater Horizon rig. BP then made a move of planning to sell $10 billion in assets since they are expecting $100 billion dollar damage compensation payment as estimated by analysts.

Also, BP announced last Tuesday they would sell their oil and gas stations in Vietnam and Pakistan for $2 billion and $4 billion respectively according to the estimates of analysts. Furthermore, BP is also to sell their Oil fields and gas processing plants in Texas and southeast New Mexico for $3.1 billion, their upstream Western Canadian gas business for $3.25 billion, and Oil exploration and production assets in Egypt for about $650 million.

Apache Chief Executive G. Steven Farris told investors after declaring the deal, “If it hadn’t been for the Gulf incident, I’m sure we wouldn’t be sitting here tonight.”

So far, BP has already spent $4 billion to control the oil leak in the Deepwater Horizon rig and to clean up the oil spilled in the Gulf of Mexico. It also included compensation payments for other gulf businesses affected by the major oil spill. This oil spill in the Gulf of Mexico would be considered one of the most devastating environmental disasters in the history of the United States. BP will further be paying for the damages, legal costs, and fines for the following years as forecasted by analysts.

BP was requested some assistance from their partners in the devastated oil rig namely Anadarko Petroleum Corp. and MOEX 2007 LLC. They requested for financial assistance to be contributed for the compensation payments. However, both partners declined the request since the compensation payments were huge.

According to BP Chairman Carl-Henric Svanberg in a statement, “BP’s board believes that there are opportunities to divest assets which are strategically more valuable to other parties than they are to BP.”

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