Libya should buy a strategic stake in BP PLC (BP.LN) to take advantage of its weak share price following the giant oil spill from one of its wells in the Gulf of Mexico, the country's top oil official told Zawya Dow Jones.
Libya should buy a strategic stake in BP PLC (BP.LN) to take advantage
of its weak share price following the giant oil spill from one of its wells in
the Gulf of Mexico, the country's top oil official told Zawya Dow Jones.
Shokri Ghanem, Chairman of
Libya
's
National Oil Co. said he will recommend buying a stake in BP to the Libyan
Investment Authority, or LIA, the North African state's sovereign wealth fund.
"BP is interesting now with the price lower by half and I still have trust
in BP, I will recommend it to the LIA," Ghanem said in a telephone
interview Monday.
"It's a good opportunity for bargain hunters," he added.
Ghanem's remarks follow local press speculation that oil-rich
Middle
East
investors are considering a strategic investment in BP as it continues
to battle the oil spill in the
Gulf of Mexico
. The
spill, now in its 76th day, ranks among the largest in
U.S.
history and has hurt the region's fishing and tourism industries.
"We are not selling any assets right now but we do wish to sell $10
billion of non-core upstream assets over the next 12 months; if people want to
buy BP shares we always welcome new shareholders," said John Pack, a
London-based spokesperson for BP.
BP's shares last traded up 3.5% at 333.0 pence.
Shares have dropped from as much as 640 pence before the April 20 blast aboard
Transocean Ltd.'s (RIG) Deepwater Horizon drilling rig--leased by BP for its
Macondo well--in the Gulf of Mexico.
"Gulf sovereign wealth funds and other investors from the region might
express interest given the record of investing in companies in distress which
have brought confidence and placed a 'floor' under the companies' share price
and prevented further depreciation," said John Sfakinakis, chief economist
at Riyadh-based Banque Saudi Fransi-Credit Agricole.
Mohammed Layas, Executive Director of the Libyan Investment Authority, told
Zawya Dow Jones Monday he had "no comment at this stage."
The LIA in 2008 acquired a stake of below 2% in
Italy
's Eni
SpA (E), which has extensive operations in
Libya
,
after buying shares on the open market. The state fund was also targeting other
energy investments including in international oil companies, Ghanem said in
June 2009.
"A stake in BP could bring privileged access to sophisticated production
know-how," said Eckart Woertz, director of economic studies at the
Dubai-based
Gulf
Research
Center
.
Libya
has
stepped up overseas investments since economic sanctions were lifted on the
country in 2004. It has also attracted significant investments from oil firms
including Eni, Total S.A. and Occidental Petroleum in recent years.
BP and its Libyan partner, the Libya Investment Corp., or LIC, in May 2007
signed an exploration and production deal with NOC worth at least $900 million
for the onshore Ghadames and offshore Sirt areas, covering an exploration area
of around 54,000 square kilometers.
BP said earlier Monday the cost of the response to the
Gulf
of Mexico
oil spill so far is $3.12 billion, as it ramps up
oil-containment efforts following storm surges caused by Hurricane Alex.
The cost figure includes containment, relief-well drilling, grants to
Gulf
states
, claims paid and federal costs, BP said in a
statement.
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