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BP Spill Assets

BP Unloads Assets So It Can Pay for Gulf Oil Spill

LONDON (Oct. 18) — BP has agreed to sell business interests in Vietnam and Venezuela worth an estimated $1.8 billion to TNK-BP, the Russian oil venture half owned by the London-headquartered oil company.

The deal is part of series of sales by the oil giant to help pay for damages incurred after the April explosion on board its Deepwater Horizon rig, which killed 11 workers and sent more than 200 million gallons of crude spilling into the Gulf of Mexico. BP has said that it hopes to raise up to $30 billion in asset sales by the end of 2011, the BBC noted.

This sell-off will also put TNK-BP on the road to becoming a major international company, a long-term goal of the group of billionaire Russian shareholders who own half the company, the Financial Times noted. Just two years ago, those business magnates attempted to seize control of the firm in a brutal boardroom battle with BP executives, who they claimed were trying to block their plans to expand overseas. At the height of that row in 2008, the then-boss of TNK-BP, Robert Dudley — who took over as BP CEO from gaffe-prone Tony Hayward earlier this month — was forced to flee the country, alleging that his Russian partners had waged a “deeply unpleasant” harassment campaign against him.

However, the new deal is evidence that the once warring sides have finally reached a peace settlement. Dudley praised the agreement in a statement, saying the assets would “offer TNK-BP a solid foundation as it builds its business outside Russia.” Meanwhile, the interim chief of TNK-BP, Russian oligarch Mikhail Fridman — who has previously denied deliberately intimidating Dudley during his stay in Russia — said in a press release that “the acquisitions in Venezuela and Vietnam mark a milestone in TNK-BP’s strategic expansion in the global energy market.”

In Vietnam, TNK-BP will take over BP’s stakes in an offshore natural gas project, a major natural gas pipeline and a power plant in the south of the country. The Venezuelan deal will provide the Moscow-based company with significant shares in a petroleum processing plant, as well as two oilfields owned by PDVSA, Venezuela’s state-run oil company.

Theunis Bates

Theunis Bates Contributor


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