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BP oil leak bill increases, as shares rise on sell-off talk

by Staff Writers
London (AFP) July 12, 2010
BP said Monday the disastrous oil leak in the Gulf of Mexico had cost it 3.5 billion dollars (2.78 billion euros), but the petroleum giant's shares rose sharply on reports it was about to sell some assets.

Engineers battled Monday to cap the damaged well, which has been spewing oil into the Gulf of Mexico since it exploded in April, killing 11 workers and triggering the worst environmental disaster in US history.

The beleaguered British-based oil company said the latest operation to seal the massive leak, which began on Saturday, was "proceeding as planned."

In New Orleans, a US presidential commission officially launched its probe into the oil spill Monday.

BP shares closed up more than nine percent in London trading on reports that it may have buyers lined up for the possible sale of assets to fund the cost of the clean-up.

In a statement, BP said: "The cost of the response to date amounts to approximately 3.5 billion dollars, including the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid, and federal costs."

Almost 750,000 barrels of oil had been collected or flared by containment systems by July 10 and plans were being developed which could allow up to 60,000-80,000 barrels per day to be collected, it added.

Work on relief wells to intercept the original well continued, it said, with plans to "kill" the flow of gas and oil still on track for the first half of August.

"Although uncertainty still exists, the first half of August remains the current estimate of the most likely date by which the first relief well will be completed and kill operations performed," BP said.

About 46,000 personnel, more than 6,400 vessels and dozens of aircraft were engaged in the response effort, BP said.

Reports on Sunday said the company was in talks to sell up to 12 billion dollars of assets, including a substantial stake in a giant Alaskan oil field, to its rival Apache Corporation.

Apache approached BP several weeks ago with the plan which would include a stake in Prudhoe Bay, the largest oil field in North America, the Sunday Times reported.

The Sunday Times also said BP wants to sell its 60-percent share in Pan American Energy, an Argentinian oil producer.

Chinese oil group CNOOC and Bridas, a rival Argentinian firm, are interested, the newspaper said.

BP shares continued to stage a strong recovery and finished the day at 389.85 pence, a startling rise of 9.36 percent.

The company's shares have gone up more than 30 percent since crashing to 296 pence on June 25 when an attempt to cap the leaking well failed.

However, it appears that BP chief executive Tony Hayward's flying visit to Abu Dhabi last week was in vain after the Middle East Economic Survey said it "understands that Abu Dhabi has signaled a reluctance to buy into BP."

Hayward was believed to be hoping to gain backing from oil-rich Abu Dhabi's sovereign wealth funds.

However, Chinese oil giant PetroChina has indicated it would "welcome" closer ties with BP, according to a report in Monday's Financial Times.

Mao Zefeng, head of investor relations at PetroChina, told the newspaper that the company's first reaction to BP's problems in the Gulf of Mexico was to see how it could "help BP to quickly fix the problem."

ExxonMobil, the world's largest oil company, is known to be watching BP's plight closely with a view to launching a bid for the crisis-hit company, although any buyout would need approval from competition authorities.

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