BP Share Gains Pared After Company Sticks to Schedule for Gulf Relief Well
BP Plc pared gains after the oil company said it’s sticking to the schedule for the relief wells in the Gulf of Mexico to be completed in August.
Shares closed up 2.8 percent at 327.95 pence in London after earlier gaining as much as 6.1 percent. Work to contain the oil spill continues, Sheila Williams, a London-based spokeswoman for BP, said by phone.
The first relief well may be completed in the first half of this month, ahead of the company’s schedule, according to analysts at Royal Bank of Scotland Group Plc in a note published today. The oil won’t stop flowing from the damaged pipe on the ocean floor until the at least one of the two relief wells intersects the leaking well.
“The operation could be completed more quickly than BP’s guidance of three months from the date at which drilling commenced,” RBS analysts David Cline and Barry MacCarthy said in the note. “Given that drilling of the first relief well commenced on May 2, the company’s guidance implies completion in early August.”
BP last month promised to set aside $20 billion for cleanup and compensation for the spill, and it said it will sell assets to raise funds after canceling the dividend for three quarters.
Sky News reported that the company is in talks with China National Offshore Oil Corp. to sell a $9 billion stake in Pan American Energy LLC, an Argentine producer. Williams declined to comment on the report.
BP has dropped 50 percent since the April 20 blowout on the Deepwater Horizon rig that killed 11 and started the worst oil spill in U.S. history. The company collected 23,080 barrels of oil yesterday from the leak, which the government estimates could be spewing as much as 60,000 barrels a day.