BP Shares Rise on Cap Progress, Disposal Chatter

July 12th, 2010 by Staff

LONDON (http://online.wsj.com)— BP PLC shares rose as much as 5.6% Monday after the U.K. oil major said a new system to contain the Gulf of Mexico spill was proceeding as planned, and press reports indicated that companies are interested in buying at least some of BP’s assets.

BP’s shares were recently up 4.2% at 380 pence ($5.73), outpacing a flat London market.

The company said Monday that the installation of a sealing cap over the leaking Macondo well was proceeding as planned. The new sealing-cap system, plus other measures, is expected to allow the recovery of 60,000 to 80,000 barrels of oil a day in two to three weeks, BP Senior Vice President Kent Wells said Saturday.

While the recovery system with the new cap, if all goes as planned, could contain all of the oil flowing from the broken well, BP and the U.S. government have always placed more faith in the ability of a relief well to finally kill the leak. BP said Monday that the first half of August remains “the most likely date by which the first relief well will be completed and kill operations performed.”

Shares were also being pushed higher by press reports highlighting interest from other companies in buying BP’s assets or working with the company on future projects.

The Wall Street Journal reported Monday that BP is in talks with U.S. independent oil and gas producer Apache Corp. on a deal worth as much as $10 billion that could include stakes in BP’s vast Alaska operations, according to people familiar with the matter.

The Financial Times, meanwhile, reported that China’s biggest listed oil and gas producer, PetroChina Co., would “welcome” closer co-operation with BP, while a report in the U.K.’s Sunday Times suggested that Exxon Mobile Corp. was considering a bid for BP.

BP, Apache and Exxon declined to comment.

Westhouse Securities analyst Peter Bassett said progress on the new cap combined with the outside interest in BP and its assets combined to lift the company’s shares Monday morning.

Meanwhile, BP said the cost of its response to the Gulf of Mexico oil spill had reached $3.5 billion. The company said almost 105,000 claims have been submitted and more than 52,000 payments have been made, totaling almost $165 million as of July 10.

—Mark Long in New York contributed to this article.


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