Could Libya buy BP shares?

Shokri Ghanem

It is a deal that could reshape the oil giant's future, but a leading Libyan oil executive has said he will recommend that the country's sovereign wealth fund buys a stake in BP, who has hit financial woes since the Gulf of Mexico oil spill.

With BP's share prices tumbling, Shokri Ghanem, chairman of Libya's National Oil Company, was quoted as saying BP shares were "good value for bargain hunters". It follows rumours that BP was seeking Middle Eastern investment to stop the haemorrhaging of money required for the clean-up operations in the Gulf. Since the oil spill almost three months ago, BP shares value has almost halved.

Outside investment

There has been much speculation in the press over the past week that BP could be close to being acquired by other oil giants, with Kuwaiti Investment Authority, China's PetroChina and the US oil giant Exxon Mobil said to be interested.

However Mr Ghanem's comments of, "BP is interesting now, with the price lower by half and I still have trust in BP. I will recommend it to the Libyan Investment Authority," has led ot the shares rising in price by 3.4 percent.

The firm is suffering massive costs with the clean-up hitting the firm for $3.12 billion so far, a figure that is expected to rise to over $25 billion. BP said two relief wells being drilled to stop the leak are on course for completion by August, but the current leak is still spilling into the Gulf adding to the cost of clean-up with each passing minute.

Although some of the oil is being collected, the ruptured well is still leaking while work continues on the relief wells. Work on the first relief well is continuing despite reaching a depth of 17,725 feet on 4 July. The second relief well, which started 16 May, has now reached 13,871 feet. Both wells are expected to take three months to complete from start to finish.

Meanwhile, operations to skim oil off the surface of the water have been temporarily delayed due to the start of hurricane season and Hurricane Alex sweeping through the area. To date, 673,497 barrels of oily liquid have been recovered, while a total of 275 controlled burns have been carried out. These burns have reportedly removed an estimated 238,000 barrels of oil from the Gulf.

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Summer of high prices, even after BP begins collecting oil? | BP heading for chapter 11? | Crescent: "Gulf oil spill will put industry under scrutiny

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