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BP in talks over sale of oil projects to TNK: BP

July 30, 2010 By vani Leave a Comment

(Reuters) – BP is in talks with its Russian venture TNK-BP over the sale of a $1 billion package of oil projects in Venezuela, the Times newspaper said on Thursday.

The newspaper said, without citing sources, that the talks revolve around BP’s minority stakes in two exploration and production joint ventures in Venezuela with Petroleos de Venezuela, the country’s state-owned oil producer.

A BP spokesman dismissed the report as “rumors and speculation.”

Morgan Stanley and Royal Bank of Scotland are thought to be involved in the discussions with TNK-BP, the Times said, adding that no announcement is expected imminently and rival bidders could emerge for the assets.

BP’s outgoing chief Tony Hayward told the Times on Tuesday that TNK-BP “may well be looking” to acquire some of BP’s assets as part of a disposal program, but did not give details.

(Reporting by Karolina Tagaris; editing by Dhara Ranasinghe)

Filed Under: International News Tagged With: 1 Billion, bank of scotland, bp, Bp Oil, Citing Sources, Exploration And Production, hayward, joint ventures, Minority Stakes, morgan stanley, oil producer, Oil Projects, Petroleos De Venezuela, Ranasinghe, reuters, Rival Bidders, royal bank of scotland, speculation, spokesman, Tnk Bp

UPDATE 1-BP’s Hayward quits as spill cost put at $32 bln

July 28, 2010 By vani Leave a Comment

LONDON, July 27 (Reuters) – BP Plc (BP.L) chief executive Tony Hayward will step down as head of the oil giant on Oct. 1 and be replaced by fellow executive Robert Dudley.

News of Hayward’s departure came as the company announced on Tuesday it would take a charge as a result of the Gulf of Mexico oil spill amounting to $32.2 billion, driving BP to a second quarter loss of $16.97 billion. [ID:nWLA9308]

“The tragedy of the Macondo well explosion and subsequent environmental damage has been a watershed,” chairman Carl-Henric Svanberg said, announcing Hayward’s departure. “BP remains a strong business … but it will be a different company going forward.”

BP said Dudley, currently head of BP’s U.S. operations, would be based in London and hand over his present duties to Lamar McKay. [ID:nWLA9295]

Hayward will receive a year’s salary amounting to 1.045 million pounds ($1.6 million).

Excluding oil spill and other non-operating costs, BP’s replacement cost profit was $4.98 billion, in line with the average forecast from a Reuters poll of 11 analysts.

Replacement cost profit strips out gains or losses related to changes in the value of fuel inventories and as such is comparable with net income under U.S. accounting rules.

In a third statement BP said it planned to sell assets worth up to $30 billion over the next 18 months and cut its net debt level down to between $10 billion and $15 billion over the next 18 months. [ID:nWLA9296]

The company said it would consider its position on future dividend payments at the time of its fourth-quarter results.

Filed Under: International News Tagged With: bln, bp, Bp Plc, Carl Henric Svanberg, Debt Level, Different Company, Dividend Payments, Dudley News, Environmental Damage, Gulf Of Mexico, Gulf Of Mexico Oil, Gulf Of Mexico Oil Spill, hayward, Henric, Lamar, Oil Giant, Quarter Loss, Quarter Results, reuters poll, Robert Dudley

Futures point to flat open for European shares

July 28, 2010 By vani Leave a Comment

July 27 (Reuters) – European shares were set for a flat open on Tuesday, having hit a five-week closing high in the previous session, and with investors digesting a raft of corporate earnings, including BP (BP.L) and UBS (UBSN.VX).

At 0607 GMT, futures for the STOXX Europe 50 STXEc1 were down 0.1 percent. Futures for Germany’s DAX FDXc1 were flat and those for France’s CAC FCEc1 were down 0.1 percent.

(Reporting by Brian Gorman)

Filed Under: International News Tagged With: bp, Brian Gorman, CAC, Corporate Earnings, DAX, Europe, european shares, France, futures, Germany, investors, raft, reuters, Stoxx, UBS, UBSN, Vx

TNK-BP H1 2010 profit rises to $2.43 bln

July 28, 2010 By vani Leave a Comment

July 27 (Reuters) – Russia’s third-largest oil producer, TNK-BP International (TNBPI.RTS), on Tuesday said net profit rose 21 percent to $2.43 billion for the first half of 2010, up from $2.01 billion in the same period of 2009.

TNK-BP International, half-owned by BP (BP.L), is the parent company of Moscow traded TNK-BP Holding (TNBPI.RTS).

(Reporting by Vladimir Soldatkin)

Filed Under: International News Tagged With: bp, Bp International, moscow, net profit, oil producer, parent company, reuters, rose, RTS, Russia, Tnk Bp, vladimir

BP’s Hayward to be offered role at TNK-BP: report

July 28, 2010 By vani Leave a Comment

(Reuters) – BP Plc Chief Executive Tony Hayward is to be nominated for a board position at its Russian venture TNK-BP when he steps down from his current role, Sky News reported, citing sources.

TNK-BP declined to comment on the Sky News report on Monday when contacted by Reuters.

BP is expected to install American Bob Dudley as CEO, sources close to the company said, replacing Hayward who has come under fire for his gaffe-prone handling of the worst oil spill in U.S. history.

Dudley, the U.S. executive managing the response operation to the spill in the Gulf of Mexico, is poised to get the top job in the next 24 hours, a move that could soften U.S. criticism of the British oil major.

Shares in BP closed up 4.6 percent at 417 pence, valuing the business at about 80 billion pounds ($123.6 billion).

(Reporting by Rhys Jones; Additional reporting by Vladimir Soldatkin; Editing by David Holmes)

Filed Under: International News Tagged With: Board Position, bp, Bp Plc, British Oil, ceo, chief executive, Citing Sources, david holmes, dudley, Gulf Of Mexico, hayward, news report, Oil Spill, pence, reuters, Rhys Jones, sky news, Tnk Bp, top job, vladimir

Factbox: BP’s next steps on killing Gulf leak

July 28, 2010 By vani Leave a Comment

(Reuters) – BP Plc was working to ready the first of two relief wells to bore into its blown-out Gulf of Mexico well about 13,000 feet under the seabed and permanently plug and seal the leak.

Along the way, the company aims to begin the kill process with a “static kill,” which involves pumping heavy drilling mud and cement in the well from the top.

The well remains capped, having shut in all oil flow since July 15.

Here is an explanation of BP’s next steps, according to retired Coast Guard Admiral Thad Allen, the top official overseeing the spill response, and Kent Wells, BP’s senior vice president of exploration and production:

THE RELIEF WELLS

* On July 25 a rig that had been drilling the first of two relief wells was reconnecting its riser and drillpipe after shutting down operations to move out of the path of bad weather.

* Once reconnected, a plug that had been placed in the well to keep it stable will be removed, and the well will be cleaned.

* BP will then insert and cement in place the last piece of pipe, called casing, at the bottom of the relief well prior to boring into the Macondo well.

* After the casing is in place but before drilling resumes, BP aims to begin a static kill.

* The relief well has drilled 12,864 feet beneath the seabed and remains on target to intercept and kill the leak in August. The weather-related shutdown has likely pushed the finish date to the second half of August from the middle of the month.

* The finish date depends on how well the static kill works, how deep the relief well must bore into the stricken well, and how many times BP must pump in heavy drilling fluid and cement.

* The second relief well, a backup to the first, bored 10,961 feet beneath the seabed by July 12, when drilling was suspended to avoid disturbing the first relief well’s use of sensors to find its right intercept target.

THE STATIC KILL:

* The static kill resembles BP’s failed “top kill” in May, except that the well is capped and sealed.

* The top kill failed because heavy mud shot out the top of the leak along with crude and couldn’t smother the leak.

* As with the top kill, heavy mud will be pumped into the well from surface vessels through pipes and hoses connected to a failed blowout preventer at the seabed.

* Because oil no longer has an escape route, the mud is expected to push it back down to the reservoir.

* Cement can then be pumped into the well to plug and kill the leak at the bottom.

* The first relief well will then drill into the space between the well’s pipe and the strata, called the annulus. If oil is flowing there, more mud and cement will be pumped in through the relief well.

* Once that cement dries, the relief well will bore into the well pipe to ensure that the static kill plugged it. If not, more mud and cement will be pumped in at the bottom to finish the job.

* The static kill could accelerate the entire kill process if it works as intended.

WELL PRESSURE

* BP has monitored pressure in the well since it was sealed shut on July 15 for signs of leaks or problems.

* Pressure has slowly risen from 6,700 pounds per square inch on July 16 to 6,904 psi on July 25.

* Rising pressure indicates the pipe and cement in the well remain intact after the April 20 blowout. Lower or falling pressure would be a sign the well is damaged, allowing oil to leak out the sides and possibly breach the seafloor.

* Pressure above 7,500 psi would show the well is intact, while pressure that falls or fails to rise above 6,000 psi would indicate a problem. The slowly rising pressure could be a sign that the reservoir is largely depleted from the leak.

BACKUP OIL-CAPTURE VESSELS

* BP still aims to assemble a surface oil-capture system of four vessels that can siphon up to 80,000 barrels a day from the wellhead.

* That system will include a rig, the Helix Producer; a well-testing ship, the Toisa Pisces; and two Transocean Ltd. drillships, the Discoverer Enterprise and the Discoverer Clear Leader.

* Each would be connected to wellhead equipment via hoses and pipes that allow for a quick disconnect if a hurricane approaches.

* The system remains on tap as a backup if any problems arise with the static kill and the first relief well.

(Reporting by Kristen Hays in Houston; Editing by Paul Simao)

Filed Under: International News Tagged With: Admiral Thad Allen, bad weather, bp, Bp Plc, Cement, Drilling Fluid, Drilling Mud, Exploration And Production, Factbox, Gulf Of Mexico, Intercept Target, Kent Wells, Macondo, Oil Flow, Relief Wells, reuters, rig, seabed, senior vice president, Spill Response

BP says relief well rig back at Gulf spill site

July 28, 2010 By vani Leave a Comment

(Reuters) – A rig that had been drilling a relief well to plug BP Plc’s Gulf of Mexico oil leak was reconnecting equipment to resume work at the spill site on Sunday, the top official overseeing the spill response said.

Once the last bit of pipe, or casing, is cemented in place near the bottom of the relief well this week, BP will begin a “static kill” the first week of August, retired Coast Guard Admiral Thad Allen told reporters at a briefing.

“Generally the next week will be preps, making sure everything is ready to go,” he said.

The leak remains capped after what was Tropical Storm Bonnie disintegrated over the Gulf on Saturday.

Allen had said the static kill, which involves pumping heavy drilling mud and cement into the well from the top, could start three to five days after the casing is cemented in the relief well.

He said on Sunday that the timeline was “refined and revised” after consultations with BP.

The entire operation was interrupted last week when the storm was bearing down on the Gulf.

While most rigs and ships left the spill site out of caution, ships running underwater robots that provide live feeds of the wellhead stayed and continued to operate, BP spokeswoman Jessie Baker said.

Those feeds showed no problems with the cap, which has shut in all flow from the leak since July 15, BP said.

A pair of Transocean Ltd rigs had been drilling two relief wells, the second well a backup for the first. BP suspended drilling on the second relief well July 13 so it wouldn’t interfere with the first one.

BP stopped work on the first well July 20 in advance of the storm and put a plug inside to keep it stable until the last round of casing could be installed.

Allen said on Sunday that the casing work will start “sometime in the next week” once the rig reconnects to the well, removes the plug and cleans out the hole.

While the static kill can start once the casing is in place, the relief well will still bore into the blown-out Macondo well near its bottom 13,000 feet beneath the seabed, Allen said.

Kent Wells, BP’s senior vice president of exploration and production, said in an update on BP’s website that the static kill might plug the leak on its own. The relief well will confirm that or finish the job, Wells said.

“Those two work in tandem,” Wells said.

And Allen said on Sunday that BP will still move ahead with assembling a four-vessel oil-capture system that can handle up to 80,000 barrels a day if needed.

(Reporting by Kristen Hays; Editing by Eric Beech)

Filed Under: International News Tagged With: Admiral Thad Allen, bp, Bp Oil, Bp Plc, casing, Drilling Mud, Gulf Of Mexico, Gulf Of Mexico Oil, jessie, Live Feeds, Oil Leak, Relief Wells, reuters, rig, Spill Response, spokeswoman, Transocean, Tropical Storm Bonnie, underwater robots, wellhead

BP says no plans to issue statement on CEO

July 28, 2010 By vani Leave a Comment

(Reuters) – BP said it had no plans to issue a statement about a board meeting on Monday which sources close to the company said discussed whether to confirm a plan to ditch Chief Executive Tony Hayward.

BP’s board was due to confirm a plan to replace Hayward with Bob Dudley, who is currently heading BP’s oil spill response, sources close to the company said.

BP is due to issue its second quarter results on Tuesday at 0600 GMT/2 a.m. EDT.

(Reporting by Tom Bergin, Editing by Sandra Maler)

Filed Under: International News Tagged With: board meeting, bp, Bp Oil, ceo, chief executive, dudley, hayward, Maler, Oil Spill Response, Quarter Results, reuters, s board, Sandra, Tom Bergin

BREAKINGVIEWS-Hayward’s exit would not bring BP catharthis

July 26, 2010 By vani Leave a Comment

LONDON, July 25 (Reuters Breakingviews) – BP’s (BP.L) (BP.N) chief executive looks set to pay the appropriate price for mishandling the Gulf of Mexico disaster. But Tony Hayward’s impending departure should not be seen as providing redemption for the rest of the UK oil major’s board, let alone for its chairman, Carl-Henric Svanberg.

Whether through tiredness, bad luck or poor media experience, Hayward said the wrong thing on too many occasions after BP’s well blew out on April 20. One such slip, saying he “wanted his life back” just weeks after the fatal accident, has now become prophetic. Hayward became a global hate figure. It has for weeks been evident that his continuing presence at the helm of BP would obstruct the group’s rehabilitation in the United States, potentially saddling the shares with a discount. While going would be the right thing, it would have been better to say weeks ago that he would step down once the well was capped and when a successor could be found.

Some will see Hayward’s anticipated exit as evidence that Svanberg is belatedly showing strong leadership. But it is questionable whether the chairman’s own weakened authority can be restored. He should have publicly helped Hayward fight the fallout from the disaster sooner than he did. Worse, Svanberg allowed the board to dither over the dividend even when it was clear that continuing with the payout was both politically foolish and financially irresponsible. Ideally, Svanberg would have been the first to leave, with his successor finding a new CEO.

Hayward’s short tenure at the top — he has lasted less than four years — carries lessons for all bosses. The ability to handle a hostile media in a crisis is clearly as vital a skill in a boss as management or technical capability. A constructive relationship with a supportive and weighty chairman is also critical. And the episode has shown that new brooms cannot help but inherit some of the baggage of previous management. Hayward was vulnerable largely because of BP’s safety failings under his predecessor John Browne — even though he was appointed on a manifesto to fix them. It may now be for Bob Dudley, the U.S. BP executive tipped to succeed Hayward, to grapple with these challenges.

CONTEXT NEWS

– BP has decided chief executive Tony Hayward should step down over his handling of the Gulf of Mexico oil spill and his departure could be announced in the coming days, Reuters reported on July 25. [ID:nN25157641]

– For previous columns by the author, Reuters customers can click on [HUGHES/]

(Editing by Hugo Dixon and David Evans)

Filed Under: International News Tagged With: Bad Luck, bp, Breakingviews, Brooms, Constructive Relationship, dividend, fallout, Gulf Of Mexico, hayward, helm, Henric, Hostile Media, Impending Departure, media experience, Redemption, reuters, s board, Technical Capability, Tiredness, Uk Oil

BP says relief well rig back at Gulf spill site

July 26, 2010 By vani Leave a Comment

HOUSTON, July 25 (Reuters) – A rig that had been drilling a relief well to plug BP Plc’s (BP.L) (BP.N) Gulf of Mexico oil leak was reconnecting equipment to resume work at the spill site on Sunday, the top official overseeing the spill response said.

“Generally the next week will be preps, making sure everything is ready to go,” he said.

The leak remains capped after what was Tropical Storm Bonnie disintegrated over the Gulf on Saturday.

Allen had said the static kill, which involves pumping heavy drilling mud and cement into the well from the top, could start three to five days after the casing is cemented in the relief well.

He said on Sunday that the timeline was “refined and revised” after consultations with BP.

The entire operation was interrupted last week when the storm was bearing down on the Gulf.

Those feeds showed no problems with the cap, which has shut in all flow from the leak since July 15, BP said.

A pair of Transocean Ltd (RIGN.VX) (RIG.N) rigs had been drilling two relief wells, the second well a backup for the first. BP suspended drilling on the second relief well July 13 so it wouldn’t interfere with the first one.

BP stopped work on the first well July 20 in advance of the storm and put a plug inside to keep it stable until the last round of casing could be installed.

Allen said on Sunday that the casing work will start “sometime in the next week” once the rig reconnects to the well, removes the plug and cleans out the hole.

While the static kill can start once the casing is in place, the relief well will still bore into the blown-out Macondo well near its bottom 13,000 feet (2.5 miles/4 km) beneath the seabed, Allen said.

“Those two work in tandem,” Wells said.

And Allen said on Sunday that BP will still move ahead with assembling a four-vessel oil-capture system that can handle up to 80,000 barrels a day if needed. (Reporting by Kristen Hays; Editing by Eric Beech)

Filed Under: International News Tagged With: Admiral Thad Allen, bp, Bp Oil, Bp Plc, casing, Drilling Mud, Gulf Of Mexico, Gulf Of Mexico Oil, Live Feeds, Oil Leak, Relief Wells, reuters, rig, Rign, Spill Response, Transocean, Tropical Storm Bonnie, underwater robots, Vx, wellhead

UPDATE 2-BP says relief well rig back at Gulf spill site