BP Says It Can Stay Afloat Without New Cash for Oil Spill

July 6, 2010
Company also indicated it would welcome new shareholders and appealed to existing stock holders to stay on board

BP insisted on Tuesday that it can cope with soaring oil spill costs without asking shareholders for cash, amid reports that Britain is working on a crisis plan if the company is sunk by the disaster.

But BP also flashed a signal that it would welcome new shareholders, and also appealed to existing stock holders to stay on board.

"Oil company BP is ... still gaining after the weekend news concerning the possibility of a strategic investor coming on board," said IG Index analyst David Jones.

"Today's report that BP won't be issuing any more shares has calmed any nerves that its value would be diluted."

A company spokeswoman told AFP that "we are not issuing any new equity," denying weekend reports that BP was planning to sell new stock to a strategic investor.

"We welcome new shareholders to come onto the shareholder register and we welcome existing shareholders who want to take a bigger amount of shares."

The British government is meanwhile working on crisis action in case the company is ruined by the costs of coping with the oil spill, The Times reported on Tuesday without citing its sources.

The talks, with officials from the British government's Department for Business and the Treasury, show mounting concern that the company could collapse, the report said.

"It is not clear how bad this will get, but the government needs to be prepared for any eventuality," said a person familiar with the talks cited by The Times.

The daily paper added that British Prime Minister David Cameron and Energy Secretary Chris Huhne would discuss BP's future with U.S. government officials in a trip to Washington later this month on July 20.

The Prime Minister's official spokesman declined to comment on The Times report.

"Our position on contingency plans with respect to individual companies is if they are happening we would never comment on them," the spokesman said.

On Monday, BP revealed that its costs over the Gulf of Mexico oil spill have soared above $3 billion for the first time.

Chief Executive Tony Hayward, meanwhile, was visiting ex-Soviet Azerbaijan Tuesday as the company seeks to offload assets.

"The chief executive of BP has arrived in Azerbaijan. The aim of the visit is to discuss ongoing projects," BP Azerbaijan spokeswoman Tamam Bayatly told AFP. She said further details of the visit would be released later.

Copyright Agence France-Presse, 2010

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