BP chief visits home of world's top sovereign wealth fund

7th July 2010, Comments 0 comments

BP chief executive Tony Hayward was in oil-rich Abu Dhabi on Wednesday amid speculation the British giant is seeking support from sovereign wealth funds following the Gulf of Mexico oil disaster.

BP officials declined to give details of Hayward's visit to the United Arab Emirates capital but said he had been engaged in a series of meetings.

"We cannot comment about the content of the meetings. All we can say is that (Hayward) met key business partners and BP staff" in Abu Dhabi, Sheila Williams, a BP press officer in London, told AFP.

BP is reportedly seeking the support of foreign sovereign wealth funds (SWF) in the wake of the Gulf of Mexico oil disaster and the resulting collapse in its share price to stave off possible takeover bids by rivals.

Dow Jones Newswires said that Hayward held talks with Abu Dhabi's powerful crown prince, Sheikh Mohammad bin Zayed al-Nahayan, and discussed the possibility of the emirate taking a 10 percent equity stake in BP.

There was no immediate official confirmation of the meeting.

The Abu Dhabi Investment Authority (ADIA) is considered the world's largest sovereign wealth fund with assets of more than 600 billion dollars.

An ADIA spokesman, contacted by AFP, too declined to comment on Hayward's meetings in luxury palaces from which journalists were barred access.

"It's obvious the Gulf sovereign funds are interested in BP," said Dubai-based analyst Ibrahim Khayat.

"It's an opportunity not to be missed, especially as the group's current financial difficulties do not put into question the strategic value of its assets around the world," he said.

"Traditionally, Middle East SWFs invest for the long term... especially in developed markets and when stocks can be picked up at large discounts," said Saud Masud, head of research at the UBS financial services group in Dubai.

Kuwait, however, ruled out an increase in its holdings in BP.

"We are not currently considering increasing our stake in this company," an official of the Kuwait sovereign wealth fund, which already holds a 2.8 percent share in BP, told AFP on Wednesday.

A member of Kuwait's Supreme Petroleum Council, Ali Mohammed Akbar, told AFP it took a view on all oil-related investments even though it was ultimately an issue for the Kuwait Investment Authority.

"We do not see a need to invest in BP," Akbar said.

Hayward was in Baku on Tuesday where he reassured Azerbaijan of BP's commitment to energy projects in that country despite costs from the oil spill that have risen to more than three billion dollars.

BP has said it can cope with the soaring cost without asking existing shareholders for cash but the company has also indicated that it would welcome new shareholders.

In Saudi Arabia, the economic daily Al-Iqtissadiya said on Wednesday that Saudi investors were in London for direct negotiations with BP on a possible 10 to 15 percent share ownership.

The BP-leased Deepwater Horizon rig sank on April 22, two days after an explosion that killed 11 workers, unleashing the worst environmental disaster in US history.

The company has now spent about 3.12 billion dollars on the cost of the spill response, containment, relief well drilling, grants to the Gulf states, claims paid and federal costs.

BP agreed last month to create a 20-billion-dollar fund for costs arising from the spill and is selling non-core assets to raise 10 billion dollars.

The head of Libya's National Oil Corporation said on Tuesday that BP was an "opportunity" for investors, after the oil major's shares fell in value by half since April.

"BP currently represents an opportunity for any investor," NOC president Chokri Ghanem told AFP.

A BP spokeswoman said "we are not issuing any new equity," denying weekend reports that BP was planning to sell new stock to a strategic investor.

"We welcome new shareholders ... and we welcome existing shareholders who want to take a bigger amount of shares," the spokeswoman told AFP on Tuesday.


© 2010 AFP

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