BP Rises for Fourth Day on Relief Wells, CEO's Middle East Trip
BP Plc CEO Tony Hayward surveys oil recovery operations aboard the Discover Enterprise drill ship in the Gulf of Mexico. Photographer: Sean Gardner/Pool via Bloomberg
July 8 (Bloomberg) -- Daniel Pickering, an analyst at Tudor Pickering Holt & Co., discusses the outlook for BP Plc following Chief Executive Officer Tony Hayward’s meeting with Abu Dhabi’s crown prince yesterday and potential interest of sovereign wealth funds in buying BP stock. Pickering talks with Betty Liu on Bloomberg Television’s “In the Loop.” (Source: Bloomberg)
BP Plc rose for a fourth day, the longest winning streak since the Gulf of Mexico spill started, as it came closer to stopping the leak and after Chief Executive Officer Tony Hayward met with Abu Dhabi’s crown prince.
BP rose 1.4 percent to 367 pence in London. That’s 20 percent higher than the 14-year low reached last month following the blowout on the Deepwater Horizon rig in the Gulf of Mexico on April 20.
“There’s an appreciation that the relief wells are ahead of schedule, and that could be very good for BP,” said David Hart, an analyst at Westhouse Securities Ltd. in London. “Drumming up interest in the Middle East also indicates that there’s some value in the shares after they sold off quite heavily.”
Hayward said yesterday the meeting with Sheikh Mohammed bin Zayed Al Nahyan, crown prince of Abu Dhabi and chairman of Mubadala Development Co., an investment arm of the government, was “very good.” BP spokeswoman Sheila Williams said that Hayward is meeting business partners and employees today in Angola, where BP produces oil in 11 deepwater fields.
In the Gulf of Mexico, BP is drilling two relief wells that would permanently plug the leak, the first of which is within 15 feet of the leaking well and interception may occur ahead of schedule, National Incident Commander Thad Allen said yesterday.
BP spokesman Mark Proegler said July 5 that the first relief well may be finished by the end of this month, and the Wall Street Journal reported today that it may be completed by July 27, when BP reports second-quarter earnings.
Three-Month Schedule
BP spokesman Toby Odone said today the company is sticking to its schedule to finish the wells three months from the start of drilling in May.
Once the well is reached, crews may need seven to 10 days to stop the flow by injecting heavy mud, followed by a cement seal, Allen said.
Sovereign wealth funds may be interested in buying BP stock after its price dropped by about half. Shares are now down 43 percent since the accident.
BP is a “good buy,” Shokri Ghanem, Libya’s top oil official, said in a Bloomberg Television interview this week. He’s advising Libya’s sovereign wealth fund to invest in the company.
Hayward last month pledged to set aside $20 billion to compensate the spill’s victims and finance the cleanup. To pay for it, the company halted dividend payments and plans to sell $10 billion in assets across the globe.
To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net.
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