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Abu Dhabi Considers BP Investment, Crown Prince Says

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Abu Dhabi considering BP investment, says Crown Prince
Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed Al Nahyan said the emirate is considering making an investment in BP Plc. Photographer: Udo Weitz/Bloomberg

July 13 (Bloomberg) -- Abu Dhabi’s crown prince, a member of the board of one of the world’s largest sovereign wealth funds, said the emirate is considering an investment in BP Plc after the company lost half its value following the worst oil spill in U.S. history.

“We are still thinking about it,” Sheikh Mohammed bin Zayed Al Nahyan said in an interview in Abu Dhabi today, when asked about potentially buying a stake in the London-based oil producer. “We are looking across the board. We have been partners with BP for years.”

BP Chief Executive Officer Tony Hayward said on July 7 that he had a “very good” meeting with the crown prince as analysts said the oil producer may be looking for support from Middle East investors. Hayward pledged last month to set aside $20 billion for spill victims and cleanup, to be paid for by scrapping the dividend, reducing investment and asset sales.

“Lots of people would like to get into BP now,” said Christine Tiscareno, an analyst at Standard & Poor’s in London. “Hayward has assured people that things are under control. If Abu Dhabi increases its stake, it is saying that there is a future for BP, it’s not a dying company.”

Share Performance

BP shares have gained 25 percent since the start of July and rose for a second day in London trading, gaining 2.9 percent to close at 410.35 pence. The stock is down 37 percent since the April 20 accident in the Gulf that killed 11 workers and started the spill.

“We would welcome any investor buying or increasing their stake,” said Robert Wine, a spokesman for BP in London. He declined to comment on Abu Dhabi in particular.

Middle East investors came to the rescue of Barclays Plc during the financial crisis in 2008. Abu Dhabi’s royal family and Qatar purchased a 32 percent stake in the company after it decided against accepting funds from the U.K. government.

Abu Dhabi investors made 1.46 billion pounds ($2.2 billion) when they sold shares in June 2009. Qatar made 615 million pounds when it sold in October.

BP installed a new cap on the well that may be able to stop the flow of oil until relief wells can plug it permanently. It will start testing pressure in the well today, Doug Suttles, chief operating officer for exploration and production, told reporters yesterday.

The crown prince is chairman of Mubadala Development Co., an investment arm of the Abu Dhabi government. Abu Dhabi’s sovereign funds hold a combined $500 billion, according to Roubini Global Economics.

BP produces oil in the sheikhdom, where it is a partner with state-run Abu Dhabi National Oil Co., known as Adnoc, in a venture that dates back to the first oil concession granted in the 1930s in what is now the U.A.E.

To contact the reporter on this story: Ayesha Daya in Dubai adaya1@bloomberg.net; Brian Swint in London at bswint@bloomberg.net.

To contact the editors responsible for this story: Stephen Voss at sev@bloomberg.net; Will Kennedy at wkennedy3@bloomberg.net.

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