BP IS not planning to issue new shares, the company said yesterday, in spite of the pressure on its finances caused by its huge oil spill in the Gulf of Mexico.
The group has been making overtures to investors in countries where it has good relationships, including the United Arab Emirates, in an attempt to encourage them to buy shares, but it said that it was not trying to bring in strategic investors with new equity.
Libya’s top oil official said his country’s sovereign wealth fund should invest in BP to take advantage of the falling share price. Shokri Ghanem, chairman of Libya’s national oil company, made the comments as BP made contact with Middle Eastern investors.
“BP is interesting now, with the price lower by half and I still have trust in BP, I will recommend it to ,” Mr Ghanem said.
Shares in BP, which have lost almost half their value since the catastrophic explosion and oil spill in late April, closed 3.5 per cent higher at 333.3p in London. The group said yesterday the cost to date of the response to the spill had risen above $3 billion.
Mr Ghanem’s comments came after an official in the Gulf said BP had already been reaching out to investment entities in the region, particularly those with which it already had relations. The official said the company was looking for access to capital to make it less vulnerable to competitors and takeover bids.
The Gulf is home to some of the world’s biggest sovereign wealth funds, which have previously stepped in to inject capital into western banks, including Citigroup and Barclays.
BP has a particularly long history with the UAE, which is home to several government-controlled funds that invest in energy related assets. These include the International Petroleum Investment Co, which was used as the vehicle for Sheikh Mansour bin Zayed Al-Nahyan, a member of Abu Dhabi’s ruling family, to invest $3.5 billion in Barclays; and Mubadala. Abu Dhabi, the UAE’s capital, is also home to one of the world’s largest sovereign wealth funds, the Abu Dhabi Investment Authority, which invested $7.5 billion in Citigroup in November 2007. – ( Copyright The Financial Times Limited 2010)
