It may have been almost three years ago, but the scars of the 2010 Deepwater Horizon oil spill are raw for BP, which is still forking out to pay for the cleanup, fines and compensation operations. In its latest money-raising effort, it is selling off $5.55bn worth of oil fields to Plains Exploration and Production Company. The sale brings it a notch closer to its aim of dumping $38bn worth of assets by the end of next year
The seven main areas being sold were yielding almost 60,000 barrels of oil a day in July this year, making them valuable to the new Plains owner. In a statement, BP described the assets as ‘non-strategic’ and said it is looking to ‘long-term growth in the Gulf of Mexico’. But offloading a chunk of oil-rich ocean floor sure seems a weird way of doing it, right?
Well, BP’s chief executive, Bob Dudley, said his firm will continue to invest $4bn per year in its other Gulf of Mexico operations for the next decade. It has four giant platforms in the region and by the end of this year plans to have at least eight drilling rigs in place. So whilst it is offloading some serious assets, it will still have more drilling capacity in the Gulf than it has ever had before.
The Deepwater Horizon disaster was heralded as the worst oil spill in the history of US oil production, and sparked a minor diplomatic row after US president Barack Obama repeatedly referred to a fictional company called ‘British Petroleum’ in an attempt to divert blame away from American business. At the time, the company was owned by just as many American shareholders as British ones.
But even though BP is well on its way to having paid its dues for the disaster - it has just $6bn of planned disposals left to complete – US authorities are still on its case. Just last week, the US Department of Justice said it wants to prove that the 2010 disaster was caused by gross negligence from the oil firm. It also suggested BP could be forced to pay much bigger fines than the $3.5bn BP has already earmarked for a payout.
Nonetheless, BP’s shares were up 1.2% this afternoon, suggesting investors aren’t all that worried about it.