[QODLink]
Business
BP boss in UAE amid speculation
Tony Hayward reportedly in talks with Middle Eastern investors for cash injections.
Last Modified: 07 Jul 2010 14:22 GMT
BP's Hayward agreed last month to create a $20bn fund for costs arising from the Gulf oil spill [Reuters]

Tony Hayward, the chief executive of British oil giant BP, is visiting the United Arab Emirates (UAE) apparently in a bid to raise cash to pay for the clean up in the aftermath of the Gulf of Mexico oil spill.

Andrew Gowers, a BP spokesman, said that Hayward, who arrived in Abu Dhabi on Tuesday, would be staying in the Emirati capital for "a couple of days".

He, however, would not say whether Hayward planned to sit down with the region's powerful investment funds, which have provided needed cash to Western multinationals in past times of crisis.

"He's visiting partners as he does from time to time. He's conducting normal business," Gowers said.

But Haywayd's visit comes amid reports that BP had been seeking the support of foreign sovereign wealth funds (SWF) following the collapse of its share price which increased the risk of possible takeover bids by rival companies.

Hayward reportedly held talks with Mohammad bin Zayed al-Nahayan, Abu Dhabi's crown prince, where they discussed the possibility of the oil-rich emirate taking a 10 per cent equity stake in BP.

The Abu Dhabi Investment Authority (ADIA), a sovereign wealth fund owned by Abu Dhabi, is considered the world's largest sovereign wealth fund with assets of more than $600bn.

An ADIA spokesman declined to comment on Hayward's meetings from which journalists were barred access.

Investment opportunity

BP shares have lost about half their value since the Deepwater Horizon oil rig exploded in April, causing the worst offshore oil spill in US history.

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

IN DEPTH

"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," Khayat said.

Saud Masud, from the UBS financial services group in Dubai, said that Middle Eastern funds traditionally make long term investments "especially in developed markets when stocks can be picked up at large discounts".

The Kuwait sovereign wealth fund, which holds a 2.8 per cent share in BP, 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 said.

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

Soaring costs

BP has said that it can cope with the soaring costs from the oil spill without having to ask existing shareholders for cash, but the company has also indicated that it would welcome new shareholders.

The company has spent about $3,12bn towards the oil spill clean up.

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

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

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

"It is a recommendation that could be worthwhile for Libya or any other country or investor."

Source:
Agencies
Topics in this article
People
Country
City
Organisation
Featured on Al Jazeera
Italy struggles to deal with growing flood of migrants willing to risk their lives to reach the nearest European shores.
Israel's Operation Protective Edge is the third major offensive on the Gaza Strip in six years.
Muslims and Arabs in the US say they face discrimination in many areas of life, 13 years after the 9/11 attacks.
At one UN site alone, approximately four children below the age of five are dying each day.
Featured
'I'm dying anyway, one piece at a time' said Steve Fobister, who suffers from disabilities caused by mercury poisoning.
The world's newest professional sport comes from an unlikely source: video games.
The group's takeover of farms in Qaraqosh, 30km from Mosul, has caused fear among residents, and a jump in food prices.
Protests and online activism in recent months have brought a resurgence of ethnic Oromo nationalism in Ethiopia.
Chemotherapy is big business, but some US doctors say it could be overused and are pushing for cheaper and better care.
join our mailing list