BP will not quit US over oil disaster

October 25, 2010
Shares

, LONDON, Oct 25 – BP will not quit the United States over the Gulf of Mexico oil disaster that had "threatened the very existence" of the energy giant, its new chief executive Bob Dudley said here on Monday.

"I can promise you that I did not become chief executive of BP in order to walk away from the US. BP will not be quitting America," Dudley, who is a US national, told a conference of British business leaders in central London.

"There is so much at stake, both for BP and the United States. The US has major energy needs. BP is the largest producer of oil and gas in the country, and a vital contributor to fulfilling them."

The oil disaster was triggered by a blast on the Deepwater Horizon rig — leased by BP and operated by Transocean Energy — that killed 11 workers on April 20.

The broken well was eventually plugged but not before it gushed about 4.9 million barrels of oil into the Gulf waters. The spill destroyed hundreds of miles of fragile coastlines and caused BP\’s shares to collapse.

"This is a story of the damage that can be wrought by a single accident in one segment of a giant company\’s operations," Dudley told delegates at the annual conference of the Confederation of British Industry (CBI).

"From a terrible accident and environmental spill grew a corporate crisis that threatened the very existence of our company — a major loss of value and loss of trust."

Dudley began his job on October 1 after his gaffe-prone predecessor Tony Hayward was forced out over his widely-criticised handling of the oil spill disaster.

Also on Monday, BP said it was selling its interests in four Gulf of Mexico deepwater fields to Marubeni Oil and Gas of Japan for 650 million dollars just months after acquiring them.

The cash deal comes as BP looks to sell up to 30 billion dollars (21.4 billion euros) of assets by the end of 2011 to help meet its financial obligations from the Gulf of Mexico oil spill.

BP acquired the interests in the four fields — Magnolia, Merganser, Nansen and Zia — from US group Devon Energy in March as part of a wider acquisition of assets in the Gulf of Mexico, Brazil and Azerbaijan.

"When BP acquired Devon\’s Gulf of Mexico assets it was clear that these four fields did not fit well with the rest of our business in the region," said Andy Hopwood, BP executive vice president, Strategy and Integration.

"We therefore decided they would be of more value to another company than to BP," he added in a statement. BP hopes to complete the deal in early 2011.

And it expects the Gulf of Mexico spill to cost it more than 32.2 billion dollars, taking into account compensation as well as clean up costs.

Dudley on Monday pledged the group\’s commitment to safe deep-sea energy exploration.

"The deep waters are becoming an increasingly important source of energy to fuel the global economy," he told CBI delegates.

"They account for around 7.0 percent of total oil supplies now, growing to a projected 9.0 percent in 2020.

"And we are one of only a handful of companies with the financial and technological strengths to undertake development projects in these difficult geographies. And it can be done safely."

Shares

Latest Articles

Stock Market

Most Viewed