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BP announces asset sales


By Anna Driver and Matt Spetalnick

Tue Jul 20, 2010 5:24pm EDT

HOUSTON/WASHINGTON (Reuters) – British energy giant BP Plc said on Tuesday it reached a $7 billion deal with Apache Corp as part of a series of asset sales to raise money to pay for the worst oil spill in U.S. history.

BP said Apache would pay a $5 billion cash deposit on July 30 as part of the deal for upstream assets in North America and Egypt. The company said the deal, worth a total of $7 billion, would include Permian Basin assets in New Mexico, natural gas in western Canada and concessions in Egypt.

Earlier in the day, BP announced it would sell $1.7 billion worth of assets in Vietnam and Pakistan.

Rig operator Ensco Plc filed a lawsuit on Tuesday challenging the Obama administration’s new deepwater oil drilling moratorium, saying it was mostly the same as the first ban that a U.S. court already put on hold.

The Interior Department “did not analyze the situation anew and with an open mind when deciding to impose the second moratorium,” Ensco said in a complaint filed with the U.S. District Court for the Eastern District of Louisiana.

The BP asset sales were announced exactly three months after an explosion on an offshore rig killed 11 workers and caused millions of barrels of crude to spill into the Gulf of Mexico.

The spill has caused an economic and environmental disaster in five states along the Gulf Coast, hurt President Barack Obama’s approval ratings and complicated traditionally close ties with Britain.

BP has committed to raise $10 billion in the coming year to pay for damage claims, the cleanup and legal costs related to the leaking well.

BP, which said on Monday it had spent about $3.95 billion so far on the oil spill, agreed under intense pressure from U.S. authorities last month to set up an independently administered $20 billion escrow fund for damage claims from the spill.

The Obama administration has stressed that the amount is not a cap on the company’s liabilities.

During a visit to Washington, British Prime Minister David Cameron praised the company for the steps it has been taking to plug the leak and to pay for damages suffered by people in the Gulf, where the vital tourism and fishing industries have been devastated.

During a visit with Obama, Cameron said he understood U.S. anger at BP over the oil spill. But he said it was also important to both the U.S. and British economies that the company stay strong and stable.


The U.S. government on Tuesday approved another 24-hour extension of a pressure test of the well.

The broken well was capped last week — at least temporarily — after spilling up to 60,000 barrels a day of crude for three months.

The well test, which has been extended in 24-hour increments by the U.S. government, will continue until Wednesday afternoon and then be reevaluated for a possible further extension.

Scientists are now weighing another option — a so-called “static kill” to help smother and plug the leak.

The top U.S. oil spill official said BP could have a plan to proceed with the static kill option within 24 hours.

This would involve pumping heavy drilling mud and possibly cement into the well, much like BP’s failed “top kill” in May.

(Additional reporting by Doina Chiacu and Tabassum Zakaria in Washington, Matthew Lynley in New York, Kristen Hays and Chris Baltimore in Houston; Writing by Deborah Charles and Sitaraman Shankar; Editing by Eric Beech)

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