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BP eyes stake sale as leakage costs top $3 bn

Shareholders in British oil company BP balked at reports it would seek urgent investment from a wealthy West Asian or Asian country as clean-up costs for its US oil spill topped $3 billion.

business Updated: Jul 05, 2010 22:51 IST

Shareholders in British oil company BP balked at reports it would seek urgent investment from a wealthy West Asian or Asian country as clean-up costs for its US oil spill topped $3 billion.

Over the weekend, media reports said BP was looking for a strategic investor among the sovereign wealth funds of West Asia and Asia.

An investor would help ward off a takeover and raise funds for the liabilities racking up behind the worst oil spill in US history, the reports said.

BP shares rose 2.4 per cent in London to 330 pence, but some shareholders balked at the idea of a strategic investor.

“We don’t think a strategic partner is at all necessary,” said one top BP shareholder who did not want to be named. “We think this is just people trying to panic the company and stampede into doing something to earn huge fees from selling new shares in BP. Shareholders will be saying ‘No, thank you’ to this and we have communicated this.”

Another top-10 investor agreed that BP “probably did not” need a strategic investor.

The Sunday Times reported that BP’s advisers were trying to drum up interest among rival oil groups and sovereign wealth funds to take a stake of between 5 and 10 per cent in the company for up to £6 billion ($9.1 billion). BP declined to comment.

Arabic language daily al-Jarida said state-run Kuwait Foreign Petroleum Exploration Co is planning to invest in oil fields in Egypt, Yemen, east Asia.

BP shares have lost more than half their market value since the worst US oil spill in history struck on April 20.

Attempts to stop the flow have been unsuccessful, with BP now pinning hopes on a relief well to be completed in August.