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BP to fight US over demand for disclosure

Fallen: BP’s share price has suffered through the Deepwater Horizon disaster

By Rob Davies
Last updated at 10:45 PM on 7th July 2010

BP is set to defy demands by the US Department of Justice to provide it with advance notice of key business decisions, setting the oil major on a collision course with the American authorities.

The DoJ wrote to BP’s lawyers last month, calling on the company to inform it at least 30 days in advance of any asset sales, restructuring, acquisitions or mergers.

But BP (up 16.55p to 362.1p) will refuse point blank to hand over market sensitive information before boardroom decisions are made public.

The oil major is updating the DoJ on its financial strength and the progress of its response to the spill.

But it does not believe that the DoJ has any legal right to make such intrusive demands on its business decisions.

The group considers its agreement with President Obama to place £13.5bn into a compensation fund for victims of the spill to be sufficient evidence that it is co-operating with US authorities.

In the DoJ’s letter, signed by US Assistant Attorney General Tony West, BP was warned that ‘this request is appropriate given the enormity of the Deepwater Horizon disaster and BP’s direct role in connection with the lease and the rig’.

BP’s top lawyer, Rupert Bondy, is preparing to write back to the DoJ, informing the US ministry that it cannot comply with the unprecedented demand.

And BP appears to be fighting from a rare position of strength, because the DoJ has no legal right to demand such information.

A BP spokesman said: ‘We’ve had the letter and will be discussing it with the DoJ in due course’.

Confidential information on BP’s corporate strategy is set to become even more highly-prized than usual, as the company prepares to sell nearly £7bn in assets as part of efforts to conserve cash.

One asset on the block is BP’s 60pc stake in Latin American oil business Pan American Energy, worth around £7bn alone.

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