Allen optimistic next steps will plug Gulf leak

(Reuters) – A hundred days into BP Plc’s Gulf of Mexico oil spill, the top U.S. official overseeing the spill response said on Wednesday he was confident a relief well preceded by a so-called “static kill” would plug the leak for good.

While retired Coast Guard Admiral Thad Allen would not go so far as to say the next steps are foolproof, he said at a briefing in New Orleans, “We are optimistic that we will get this thing done.”

“This has been done before. It’s not novel technology,” he said.

Allen also said he would meet with southern Louisiana parish officials on Thursday to discuss future response staffing needs. Oil has been dissipating on the water’s surface since BP sealed the cap on the well two weeks ago, shrinking skim and boom needs, he said.

He said people made jobless by the spill who found work with BP on the response will still be needed to retrieve boom, test seafood for safety and monitor or clean shorelines.

“Sooner or later we’re going to have to size the fleet to where it matches what our requirements are,” Allen said. “We will have frank, open discussions about it.”

The static kill involves pumping drilling mud and cement into the Macondo well from the top. Allen said the procedure, on schedule for Monday, could start late Sunday if preparations go smoothly.

New BP Chief Executive Officer Bob Dudley told NPR on Wednesday that the static kill could plug the leak by Monday or Tuesday. But BP and Allen said the relief well remains a critical follow-up to ensure the job is done.

(Reporting by Kristen Hays; editing by Mohammad Zargham)

European shares rise; UBS rally on strong earnings

July 27 (Reuters) – European shares rose in early trade on Tuesday, adding to gains after closing at a five-week high a day earlier, with banks rallying after strong results from UBS (UBSN.VX).

By 0709 GMT, the pan-European FTSEurofirst 300 .FTEU3 index of top shares was up 0.4 percent at 1,053.38 points, and touched its highest intraday level since June 22.

UBS rose 7.2 percent as the bank said strong equities and currency revenues drove second-quarter net profit well above forecasts. [ID:nLDE66P0CS]

Banking shares .SX7P featured among the biggest gainers, with Barclays (BARC.L), Societe Generale (SOGN.PA) and BNP Paribas (BNPP.PA) up 2.1 to 5.4 percent.

“Expectations are rising for earnings. Companies are guiding full-year forecasts up in spite of concerns about a loss of recovery momentum … and that is helping to keep these markets reasonably firm,” said Mike Lenhoff, chief strategist at Brewin Dolphin.

Among other companies reporting earnings, BP (BP.L) said it would take a charge as a result of the Gulf of Mexico oil spill amounting to $32.2 billion, driving it to a second quarter loss of $16.97 billion, and also announced that chief executive Tony Hayward will step down on Oct. 1 and will be replaced by fellow executive Robert Dudley. The stock added 0.5 percent. [ID:nWLA9308] (Reporting by Harpreet Bhal)

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

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.

Analysis: New BP boss should boost safety, asset sales

(Reuters) – Bob Dudley, who is expected to be named BP’s next CEO in the coming 24 hours, must move quickly to restore the oil giant’s battered image in its most important market, improve safety and make BP a leaner company.

BP’s board is meeting on Monday to discuss a plan for Tony Hayward to step down as Chief Executive following criticism of his handling of the Gulf of Mexico oil spill, and be replaced by Dudley, who is heading the spill response effort.

Investors hope Dudley will help repair BP’s image in the U.S, which has been damaged by a clumsy public relations strategy and a series of gaffes by Hayward. “As an American he (Dudley) may well be more acceptable to the U.S. political machine than the other alternatives for the role, which could serve to better protect value in the U.S. for BP long term,” said Jason Kenney, oil analyst at ING in Edinburgh.

The U.S. is home to 40 percent of BP’s assets and much of its growth but the public and political anger over the oil spill has led to fears BP may no longer be able to operate effectively in the U.S.

Dudley benefits from experience of navigating fractious disputes, having led BP’s Russian joint venture, TNK-BP, through a dispute between BP and its oligarchs partners over control of the company.

He will also need to improve BP’s safety record to recover the respect of U.S. lawmakers.

This could require a change to BP’s buccaneering approach, where division managers have had greater freedom than their peers in other big oil companies and top management has been willing to take greater commercial risks.

“A total change in the culture of this company is necessary,” Democratic Representative Ed Markey, chairman of the House Select Committee on Energy Independence and Global Warming, said on CBS’s “The Early Show.”

EXPENSIVE MISTAKES

In the past five years, BP has endured three of the industry’s most expensive and reputationally damaging safety and environmental lapses.

An explosion of a Texas refinery in 2005 killed 15 workers and cost the company billions, while an oil spill in Alaska in 2006 led to millions of dollars of fines and helped cement BP’s reputation in the U.S. as a reckless operator.

Regulators blamed both incidents on cost-cutting under Hayward’s predecessor John Browne.

Investors, once charmed by BP cost cutting, may now be more focused on a safer approach too from the group that pumped more oil and gas than any other non-state controlled oil concern last year.

“The company’s strategy will need to be fundamentally changed in order to rebuild future confidence in the company. Clearly, safety will need to become the centerpiece,” said Dougie Youngson, oil analyst at Arbuthnot.

Investors and analysts also predict strategic changes.

As part of a peace deal with the White House, which had been putting massive pressure on the oil giant, BP agreed to establish a $20 billion fund to compensate those affected by the spill.

It plans to sell $10 billion of none-core assets in the coming year to help finance that.

Last week the company said it had agreed the sale of $7 billion of assets and invited offers for another $1.7 billion worth of gas fields in Asia.

The company is likely to announce at its second-quarter results on Tuesday that it will increase it asset sales target, analysts at Morgan Stanley said.

The sales will hit BP’s plans to grow production, but investors and analysts said they will create a leaner, more profitable company.

“(We expect) significant asset sales and bizarrely that might prove to be the right business model for all oil majors,” said a top-15 shareholder, who asked not to be named.

“There is much greater value in the asset base of these businesses, whether it is BP or Shell, than in share prices. Actually they should think very hard at shrinking themselves down.”

However, some analysts doubt oil companies could recycle assets more quickly. The reason they are not quicker to sell off older fields, and replace them with new fields, is because they have such difficulty in making new discoveries.

BP has said its asset sale effort is focused on upstream, oil and gas production assets, but Arbuthnot’s Youngson said the oil major should also consider selling downstream assets.

“Refining is a relatively low contributor in terms of overall income and disposing of it would make a huge amount of sense, as well as generating a substantial cash injection for BP,” he said.

BP has sold refineries in recent years, but those it retains help it operate an aggressive oil trading operation that in a good year can generate over a $1 billion in profits.

(Additional reporting by Cecilia Valente in London and Eric Beech in Washington)

BP to discuss CEO Hayward’s exit on Monday -sources

July 25 (Reuters) – BP Plc’s (BP.N) board will discuss the future of Chief Executive Tony Hayward when it meets on Monday to discuss the Gulf of Mexico oil spill and the firm’s second-quarter results, sources familiar with the matter said.

They said the focus will be on the timing of Hayward’s departure, rather than whether or not he would stay with the company.

“The details are being worked out,” one source said. (Reporting by Tom Bergin, editing by James Davey; editing by Karen Foster)

Obama, Cameron to hold talks clouded by BP concerns

WASHINGTON, July 20 (Reuters) – U.S. President Barack Obama and British Prime Minister David Cameron will hold talks on Tuesday overshadowed by controversy over BP Plc (BP.L)(BP.N) that could test the vaunted “special relationship” between their countries.

They are expected to discuss BP’s role in the Gulf of Mexico oil spill and whether the British energy giant had influence in the release of the Lockerbie bomber from a Scottish prison last year — issues that have complicated transatlantic ties. [ID:nN19218995]

Cameron’s first visit to Washington as British prime minister comes amid a U.S. backlash against BP. With an eye to British pensioners and other investors at home, he has pledged to stand up for the embattled company.

Aides to both leaders insist the talks aim to build on a personal rapport they struck up at last month’s Group of 20 summit in Canada and that the agenda will focus more on the war in Afghanistan, the global economy and the Middle East.

But BP and its role in the worst oil spill in U.S. history loom large. Differences over BP’s treatment and over approaches to economic recovery raise fresh questions about a historic Anglo-American alliance already past its heyday.

Scoffing at “endless British preoccupation with the health of the special relationship,” Cameron wrote in the Wall Street Journal that he would be “hard-headed and realistic” about U.S. ties and said both countries must also strengthen bonds with rising powers like China and India. [ID:nLDE66I0I8]

DEMANDS FOR INQUIRY

Under heavy criticism over the Gulf disaster, BP faces demands from U.S. lawmakers for an official inquiry into whether it had a hand in the release of the Libyan convicted in the 1988 bombing of a Pan Am flight over Lockerbie, Scotland.

BP has confirmed it lobbied the British government in 2007 over a prisoner transfer deal because it was concerned a slow resolution would hurt an offshore drilling deal with Libya.

But the company said it was not involved in talks on the release of Abdel Basset al-Megrahi, sentenced to life for the deaths of 270 people, including 189 Americans.

On the eve of Cameron’s visit, the British government reiterated that BP had no role in the decision to free Megrahi and said it had no plans to re-examine the release, which took place despite fierce U.S. objections.

Scottish authorities said they freed the intelligence officer because he was terminally ill and they believed he had only three months to live. He is still alive in Libya.

U.S. Secretary of State Hillary Clinton told senators she was urging Scottish and British authorities to review the case.

Cameron’s aides have sought to play down the issue. He stressed in a BBC interview that, as opposition leader at the time, he thought the release was “utterly wrong.”

His visit also comes as U.S. lawmakers consider a range of rules that could require tougher safety standards on offshore drilling or bar companies like BP from new offshore leases.

Cameron has made clear he will defend BP, saying it must remain “strong and stable” to make good on its promise to compensate oil spill victims and for the sake of employees and people with pension funds invested in the company in both countries.

Obama, whose approval ratings have been undercut by public anger over the disaster, has taken a hard line with BP, although his rhetoric has softened recently amid criticism his administration had gone too in bashing the company.

Obama and Cameron will meet amid hopes a capping test on the blown-out well, which has largely choked off the undersea flow of oil, will pave the way for a permanent fix. [ID:nLDE66I13M]

UNITED FRONT, DIFFERENCES

Against this backdrop, they will present a united front on issues like sanctions against Iran and try to strike a balance between keeping up the fight in Afghanistan while signaling to skeptical voters they are progressing on exit strategies.

Obama and Cameron are sure to pay homage to their countries’ special relationship — in keeping with predecessors since Winston Churchill coined the phrase in 1946 — when they hold a joint news conference after they meet and have lunch.

But Cameron has indicated his new Conservative-Liberal Democrat coalition will work together pragmatically without being too slavish to U.S. interests.

Obama has also demonstrated a desire to see relations evolve, although he has been careful to avoid offending British sensibilities as he did earlier when he returned a loaned bust of Churchill on display in the Oval Office.

Cameron has led European attempts to cut budget deficits that have ballooned in the wake of the global financial crisis, while the United States has urged caution, arguing that reducing borrowing too fast could hinder the fragile recovery.

Both sides have agreed to disagree for now.

Cameron seems unwilling to be cast as America’s “poodle” — as British media dubbed former Labour Prime Minister Tony Blair to former President George W. Bush. But he has acknowledged that Britain is the “junior partner” of the United States.

With more to gain from their encounter, Cameron is also looking to benefit from sharing a stage with Obama, who is more popular in Britain and much of Europe than he is at home. (Additional reporting by Matt Falloon; Editing by John O’Callaghan)

Market Chatter — Corporate finance press digest

July 19 (Reuters) – The following corporate finance-related stories were reported by media on Monday:

* Australia’s Sigma Pharmaceuticals (SIP.AX) has received three bids for its Herron drugs arm and three bids for its Orphan Australia drugs business, as it seeks an improved bid from South Africa’s Aspen Pharmacare (APNJ.J), a newspaper reported on Monday. [ID:nSGE66H02D]

* Indian energy major Reliance Industries (RELI.BO) is in talks with Texas-based Quicksilver Resources (KWK.N), including for a possible buyout of the U.S. firm that develops shale gas and coal-bed methane, the Daily News & Analysis reported. [ID:nSGE66I03L]

* Emirates Telecommunications Corp ETEL.AD (Etisalat) is close to buying a 26 percent stake in No. 2 Indian telecoms firm Reliance Communications (RLCM.BO), the Financial Times reported, citing people familiar with the negotiations. [ID:nBMA008020]

* Morgan Stanley (MS.N) has sold a serviced apartment project in Pudong for 1.2 billion yuan ($177 million), making it the second-largest residential deal in Shanghai so far this year, the South China Morning Post reported on Monday. [ID:nTOE66I00Z]

* British technology company Metalysis is in talks with potential partners over a 70 million pound ($107.4 million) plan to build the world’s first low-cost titanium plant, the Financial Times said. [ID:nLDE66I00J]

* French energy group GDF Suez (GSZ.PA) is working on a 6.4 billion pound ($9.8 billion) cash bid for Britain’s International Power (IPR.L), in the latest twist in a long-running courtship, the Mail on Sunday said. [ID:nLDE66H055]

* Motorola Inc (MOT.N) is close to selling most of its wireless-network equipment business to Nokia Siemens Networks [NOKI.UL] for $1.2 billion, the Wall Street Journal reported on Sunday, citing people familiar with the matter. [ID:nN18175498]

* BP Plc (BP.L) has started canvassing shareholders about a restructuring in the wake of its Gulf of Mexico oil spill which could include a break up of the business, the Sunday Times reported. [ID:nLDE66H072]

* Brunei investment firm BMB Group is considering a bid for Club Med (CMIP.PA) that would value the French-listed holiday firm at about 800 million euros ($1 billion), the Sunday Times reported. [ID:nLDE66H050] (Compiled by Anirban Sen in Bangalore)

BP canvassing investors on possible break up: report

(Reuters) – Under-fire oil company BP Plc (BP.L) has started canvassing shareholders about a restructuring in the wake of its Gulf of Mexico oil spill which could include a break up of the business, the Sunday Times newspaper reported.

The newspaper, citing unnamed BP insiders, said options included selling the group’s refineries and petrol stations, scaling back its U.S. operations and ramping-up in-house engineering instead of outsourcing.

These are on top of the sale of about 10 percent of its assets, including its stake in the giant Prudhoe Bay field in Alaska, the Sunday Times added.

A BP spokesman said it did not comment on rumor and speculation.

BP, which has already divested much of its downstream operations in recent years, said last month it planned to sell around $10 billion of assets to help pay for costs from the worst offshore oil spill in U.S. history, but declined to say which assets were up for grabs.

On Saturday, the oil group extended for another 24 hours a critical test of its blown-out Gulf of Mexico well that has so far shut off the huge oil leak, a top U.S. official overseeing the spill response said.

(Reporting by Mark Potter; Editing by David Holmes)

BP canvassing investors on possible break up-paper

July 18 (Reuters) – Under-fire oil company BP Plc (BP.L) has started canvassing shareholders about a restructuring in the wake of its Gulf of Mexico oil spill which could include a break up of the business, the Sunday Times reported.

The newspaper, citing unnamed BP insiders, said options included selling the group’s refineries and petrol stations, scaling back its U.S. operations and ramping-up in-house engineering instead of outsourcing.

These are on top of the sale of about 10 percent of its assets, including its stake in the giant Prudhoe Bay field in Alaska, the Sunday Times added.

A BP spokesman said it did not comment on rumour and speculation.

BP, which has already divested much of its downstream operations in recent years, said last month it planned to sell around $10 billion of assets to help pay for costs from the worst offshore oil spill in U.S. history, but declined to say which assets were up for grabs. [ID:nLDE66C0N7] [ID:nN12148109]

On Saturday, the oil group extended for another 24 hours a critical test of its blown-out Gulf of Mexico well that has so far shut off the huge oil leak, a top U.S. official overseeing the spill response said. [ID:nN17152937] (Reporting by Mark Potter; Editing by David Holmes)

BP in talks with Apache and others on assets: source

(Reuters) – Under-pressure BP Plc (BP.L)(BP.N) is in talks with U.S. oil and gas company Apache Corp (APA.N) and other companies over potential asset sales, a source familiar with the situation said on Sunday, as it weighs how to pay costs related to the Gulf of Mexico oil spill.

BP, the British energy major, said in June it wanted to raise $10 billion from sell-offs to boost a $20 billion fund to clean up the worst oil spill in U.S. history.

Talks over any potential asset sales are at an exploratory stage, the source said. It is uncertain any plans will be advanced enough to be disclosed before BP announces second-quarter earnings later this month.

The Sunday Times earlier reported that BP is in talks to sell up to $12 billion in assets to Apache. The paper said Houston-based Apache approached BP with a plan a few weeks ago and negotiations were under way on the structure of an agreement.

The Wall Street Journal said on Sunday a deal with Apache could be up to $10 billion and could include stakes in BP’s Alaskan oil fields. The paper also said BP is moving along two tracks — it is in talks with Apache on a package deal worth $10 billion and in talks with a number of companies on a spectrum of assets.

A BP spokesman declined to comment on market rumors or speculation. Apache also declined comment.

The Sunday Times reported the Obama administration had told Exxon Mobil Corp (XOM.N) and another group — which it said was thought to be Chevron Corp (CVX.N) — it would not block a bid for BP, citing oil industry sources.

Exxon had sought clearance from Washington although there was no certainty it would make a move, the newspaper said.

Separately, the Independent newspaper reported on Sunday that Standard Chartered PLC (STAN.L) was believed to be one of the banks behind a $5.25 billion crisis fund set up for BP in May.

The bank contributed $2 billion to the fund, with Credit Suisse (CSGN.VX), Morgan Stanley (MS.N) and Goldman Sachs Group Inc (GS.N) said to be among those providing the balance, the newspaper said.

Standard Chartered was named in media reports in June as one of the banks advising on BP’s asset sales.

Both Standard Chartered and BP declined to comment to the Independent on Sunday.

Separately, the National Commission on the BP Deepwater Horizon Spill and Offshore Drilling said in a statement it will hold its first public meeting in New Orleans on July 12-13.

It will include testimony from Gulf Coast citizens, BP, and leading U.S. officials, the commission said.

(Reporting by Megan Davies and Paul Sandle; additional reporting by Anna Driver in Houston editing by Hans Peters and Jeffrey Benkoe)

European shares edge up on banks; G20 awaited

June 25 (Reuters) – European shares edged higher on Friday after three-sessions of losses though gains were limited as investors took caution ahead of the weekend G20 meeting and concerns over tougher financial regulation.

Stocks | European Markets | Global Markets

Banks provided the index with some support following sharp falls in the previous session. U.S. lawmakers on Friday neared a breakthrough in their historic rewrite of financial regulations as they agreed to tough new limits on banks’ trading activity.

HSBC (HSBA.L), Standard Chartered (STAN.L) and Societe Generale (SOGN.PA) rose 0.9 to 1.1 percent.

By 0723 GMT, the pan-European FTSEurofirst 300 .FTEU3 index of top shares was up 0.1 percent at 1,020.86 points, but trading was choppy. “A nervous morning ahead of the G20, no one is really wanting to take any big positions ahead of the G20,” said Justin Urquhart Stewart, director at Seven Investment Management. “There are little reasons for the market to drive higher today.”

Energy stocks featured among the worst performers, with BP (BP.L) slipping 0.6 percent. The Gulf of Mexico oil spill has entered its 67th day on Friday and with bad weather looming, clean-up and containment efforts could be hampered.

(Reporting by Joanne Frearson)

Swiss stocks – Factors to watch on June 22

ZURICH, June 22 – Swiss shares are set to open lower at the open after losses on Wall Street and in Asia.

The Swiss blue-chip index SMI .SSMI was indicated to slide 31 points to 6,489 points, premarket data provided by bank Clariden Leu showed. CLPRE

The following are some of the main factors expected to affect Swiss stocks on Tuesday.

NESTLE (NESN.VX)

Nestle is holding an investor seminar at its headquarters in Vevey.

For related news, click on [NESN.VX]

ZURICH FINANCIAL SERVICES

Zurich Financial Services is holding its investor day.

For related news, click on [ZURN.VX]

TRANSOCEAN (RIGN.VX)

A U.S. board examining the Gulf of Mexico oil spill has subpoenaed Transocean Ltd for equipment recovered from the sunken vessel and other records, setting up a potential clash with investigators conducting a separate criminal probe.

For related news, click on [TRANSOCEAN-RTRS-LEN]

SWATCH GROUP, RICHEMONT (UHR.VX) (CFR.VX)

Swiss watch exports rose 13 percent in nominal terms in May.

For related news, click on [CHTBAL=ECI]

ECONOMY [M-CH]

* The Swiss trade balance narrowed to 818 million Swiss francs in May.

COMPANY STATEMENTS [CNR-CH]

* Oxygen Biotherapeutics Inc. (OXBT.O) said on Tuesday its common stock had been approved for secondary listing on the SIX Swiss Exchange in addition to its listing on the NASDAQ Capital Market. Bank am Bellevue of Zurich is acting as the company’s listing agent. [OXBT.O]

EQUITY RESEARCH [CH-RCH]

* Goldman Sachs lowers Petroplus (PPHN.VX) price target to 22 Sfr from 22.50 Sfr

* UBS lowers price target for Ascom (ASCN.S) to 15 Sfr from 16.50 Sfr

FOR COMPANIES TRADING EX-DIVIDEND, PLEASE CLICK ON:

.EX.S for all Swiss stocks

.EXSMI.S for blue chips

.EXNSMI.S for other stocks

Document shows BP estimates spill up to 100,000 bpd

June 20 (Reuters) – An internal BP Plc (BP.L) (BP.N) document released on Sunday by a senior U.S. congressional Democrat shows that the company estimates that a worst-case scenario rate for the Gulf of Mexico oil spill could be about 100,000 barrels of oil per day.

Stocks | Global Markets | Energy

The estimate of 100,000 barrels (4.2 million gallons/15.9 million liters) of oil per day is far higher than the current U.S. government estimate of up to 60,000 barrels (2.5 million gallons/9.5 million liters) per day gushing from the ruptured offshore well into the sea.

The document was released by U.S. Representative Ed Markey.

(Writing by Will Dunham, Editing by Sandra Maler)

Factbox: Developments in the Gulf of Mexico oil spill

(Reuters) – Here are developments in the Gulf of Mexico oil spill, the largest in U.S. history:

U.S. | Green Business | Russia | Barack Obama | Gulf Oil Spill

TOP DEVELOPMENTS

* Anadarko, a non-operating partner of BP in the blown-out Macondo well, said in a statement it expects BP to pay oil spill claims because BP was “reckless” and likely engaged in “gross negligence” and “willful misconduct.”

* Anadarko CEO Jim Hackett told Reuters in an interview his company would have handled things differently and is “looking at our contractual remedies.”

* BP said in a statement it “strongly disagrees” with Anadarko’s assessment, that other parties may be responsible and that the allegations will not distract it from stopping the two-month-old leak.

* BP is seeking $1 billion in loans from seven banks for up to $7 billion, a senior London-based loan banker told Thomson Reuters LPC, as the company raises funds while battling to plug its gushing well.

POLITICS/POLICY

* The U.S. Interior Department issued a directive requiring oil companies applying for offshore drilling permits to provide more information about how they would cope with a blowout.

COMPANY/MARKETS NEWS

* A $20 billion fund set up by energy giant BP Plc to compensate financial losses due to the spill will pay legitimate claims fast, the fund’s independent administrator said on Friday.

* BP remains in a strong financial position despite the market uncertainty that has followed the spill, Chairman Carl-Henric Svanberg said on Friday.

* BP shares end down slightly in London on Friday, flat in New York trade.

* Moody’s cut BP’s credit rating by three notches on Friday, the oil major’s third downgrade in a week, and said the company’s $20 billion spill fund would not cap liabilities for the Gulf of Mexico oil disaster.

* Russia’s LUKOIL said it had not yet decided whether to buy back its stake from Conoco and was not interested in snapping up anything from BP’s $10 billion asset sale.

* BP has no plans to sell its stake in Russia’s biggest oil firm, Rosneft, as part of its $10 billion asset sale plan, the head of BP’s Russian operations said.

SPILL CONTAINMENT EFFORTS

* The first of two relief wells being drilled to plug the leak is within 200 feet of the blown-out well bore but officials say the toughest part remains – actually penetrating the damaged well.

* BP collected 25,000 barrels of oil from its blown-out Macondo well on Thursday, Coast Guard Admiral Thad Allen said.

GLOBAL REACTION

* Russian President Dmitry Medvedev said the Gulf spill should lead to a review of global energy industry co-operation.

QUOTE OF THE DAY

“Frankly, we are shocked,” Jim Hackett, CEO of BP’s Macondo well partner Anadarko, in a statement blasting BP’s handling of the well.

(Compiled by Ed Stoddard, editing by Todd Eastham)

BP spill fund chief vows to pay claims quickly

June 20 (Reuters) – The independent administrator of the $20 billion fund set up by British energy giant BP Plc (BP.L) (BP.N) to compensate victims of the Gulf of Mexico oil spill vowed on Sunday to make sure every eligible claim is quickly paid.

Appearing on NBC’s “Meet the Press,” administrator Kenneth Feinberg also rejected Republican U.S. Representative Joe Barton’s complaint last week that the fund amounts to a government “shakedown” of BP for the worst U.S. oil spill in history.

“I don’t think it helps to politicize this program,” Feinberg added.”

(Reporting by Thomas Ferraro; editing by Will Dunham)

Low Stock Shares Prompt Fannie and Freddie to Act

In 2007 Fannie Mae (FNM) and Freddie Mac (FRE) were trading above $60; now, with shares hovering around $1, the companies are delisting from the New York Stock Exchange, reports the Washington Post. While Freddie’s shares were trading above $1, Fannie has been below for 30 trading days. According to the NYSE rules, a company has to “take action to boost its shares or delist.” Shares for both companies tumbled more than 40 percent after the announcement. Both Fannie and Freddie plan to start trading on the Over-the-Counter Bulletin Board on July 8.

A complicated claims process helped bring about a new $20 billion fund set up by BP (BP) for damage claims related to the Gulf of Mexico oil spill, according to Reuters. The money would be paid into the fund over a period of four years. To help create the fund, BP agreed to “cut three quarters of dividends, significantly reduce its investment program and sell $10 billion of assets.” The company also has to pay $100 million to workers who are unable to work during the six months of halted deep-sea drilling. The deal seems to help both sides: Obama now has “his most tangible success since the crisis began 58 days ago,” and BP has little less pressure on it.

The $20 billion fund set up by BP could be dwarfed by potential criminal charges and rising civil fine estimates, according to the New York Times. For all the oil escaping into the Gulf, BP could owe $280 million. However, the real costs would come from legal costs and criminal fines that could reach $62 billion, according to Raymond James analyst Pavel Molchanov. Most likely, BP will be charged for environmental misdemeanors since “merely negligent actions can lead to misdemeanor penalties.” Any tougher penalties would require proving that BP “knew its actions would lead to the gushing well on the ocean floor.”

The circuit breakers put in place after May’s “flash crash” began operating this week and not a moment too soon: They were triggered Wednesday when the price of Washington Post Company (WPO) shares doubled in a second, reports the Financial Times. Three erroneous trades went through around 3 p.m., causing the breakers to kick in and halt trading on the company’s shares. The breakers were put in place to halt trading in an S&P 500 stock “if the price either rises or falls by 10 percent inside a period of five minutes.” Afterward, a total of 766 shares in three separate orders were determined to be incorrect.

Once again, AT&T (T) has proven itself incapable of handling the sheer amount of customers Apple (AAPL) brings in, according to the Wall Street Journal. The newest iPhone was available for preorder, but after 600,000 advance orders, AT&T had “difficulty processing orders.” The carrier had system malfunctions, and there were “reports that some customers had inadvertently gained access to others’ account information.” After the troubles AT&T stopped taking preorders yesterday but might take more orders before the phone is released on June 24. According to Apple’s site, “customers who preorder the iPhone 4 will receive their phones on July 14.”

After almost a week, Spirit airlines will no longer be grounded by a pilot strike when its planes take to the sky on Friday, reports the Wall Street Journal. The strike cost the airline “an estimated $2 million a day in lost revenue.” The airline left its passengers stranded—roughly 1 percent of U.S. passengers—even though it was supposed to “team up with other airlines to serve its customers in the event of a strike.” Spirit may have made the pilots happy, but it now has to work on winning back its customers.

Finally, companies that aren’t among the World Cup’s official sponsors are using “guerilla-marketing tactics” to get around FIFA’s restricted zones, according to the Wall Street Journal. The event is so exclusive that companies who didn’t pay the millions of dollars to become an official sponsor can’t advertise close to the venues. Despite the restrictions, companies have taken to plastering Johannesburg with advertisements. Others are resorting to drastic measures like the pair of women who supposedly were “involved in a large scale ambush marketing effort by Dutch brewer Bavaria NV.”

Obama official defends offshore drill ban in court

(Reuters) – The Obama administration defended a six-month moratorium on U.S. deepwater offshore drilling in court on Wednesday, saying the freeze was needed to ensure safety after the Gulf of Mexico oil spill.

Green Business | Barack Obama | Gulf Oil Spill

An oilfield services firm, Hornbeck Offshore Services LLC, has asked a federal court in Louisiana for an injunction lifting the ban, saying it was not based on factual findings and violated U.S. law governing offshore drilling.

Deputy Interior Secretary David Hayes told the court the ban was lawful and was needed “to ensure that no further drilling accidents occur pending review and implementation of safety protocols and procedure.”

The ban followed the explosion at a BP Plc oil well drilling site in the Gulf of Mexico on April 20, which has led to as much as 60,000 barrels of oil spewing into the fragile ecosystem each day.

“The short-term economic harm asserted by plaintiffs fails to meet their burden of demonstrating irreparable harm,” Hayes said. “In contrast, the public interest is overwhelmingly served by the limited six-month suspensions.”

He told the court the Interior Department is working with the Coast Guard to determine the cause of the disaster and that the ban was needed to “minimize the possibility of another catastrophic event on the outer continental shelf.”

The suspension will also provide time for the Interior Department to study and recommend additional safety and training needs in case of another oil well blowout, Hayes said in an seven-page declaration.

The case is Hornbeck Offshore Services LLC v. Kenneth Salazar et al in U.S. District Court for the Eastern District of Louisiana, No. 10-cv-1663.

Admiral Allen expects BP plan to capture more oil

(Reuters) – U.S. Coast Guard Admiral Thad Allen, the Obama administration’s point man on the BP Gulf of Mexico oil spill, said on Sunday he expected the company to offer a plan later in the day to capture more of the gushing crude.

Politics

Speaking on CBS’s “Face The Nation,” Allen said: “We were concerned because if you look at the new flow rate numbers the amount of oil that’s going to be potentially out there at risk, we wanted them to give us a faster plan with greater redundancy and greater reliability to move forward.

“We hope to get an answer on that later on today, in fact we will get an answer.”

Allen also said government scientists would be placing pressure-reading sensors on the seabed on Sunday to more accurately measure the amount of oil gushing into the Gulf of Mexico.

“We think we need some independent pressure readings to validate the estimates that have been made by the scientists,” he said.

The latest estimate of the partly contained leak is as high as 40,000 barrels (1.68 million gallons/6.36 million liters) a day. Allen said the true figure was probably a little less, perhaps around 35,000 barrels (1.68 million gallons/6.36 million liters) a day.

He said he expected BP Chief Executive Tony Hayward to attend a White House meeting with President Barack Obama on Wednesday.

“I would expect Tony Hayward to be there,” Allen said.

(Reporting by Alan Elsner; Editing by Eric Walsh)