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BP in shareholder talks on break-up

By Karl West
Last updated at 10:37 PM on 18th July 2010


Under-fire oil company BP has started talking to leading shareholders about a radical restructuring, including a break-up of the business.

The early stage discussions with investors have focused on a possible sale of the group’s petrol stations and refineries, scaling back its troubled US operations and ramping-up in-house engineering instead of outsourcing.

Spinning off the oil major’s so-called ‘downstream’ assets has long been mooted by analysts and investors.

It accounts for just 3 per cent of group profits, and yet employs the lion’s share of BP’s workforce, accounting for 50,000 of its 80,000 staff.

BP is also moving ahead with a sale of about 10 per cent of its assets, including its stake in the giant Prudhoe Bay field in Alaska.

The overhaul would leave BP a significantly smaller player with a much greater focus on exploration in emerging oil regions, such as West Africa and Brazil.

Talks with investors about ‘Future BP’ follow its part in the huge oil spill in the Gulf of Mexico. A source said: ‘All sorts of things have been discussed.’

A BP spokesman declined to comment.

On Saturday, the oil group extended for another 24 hours a critical test of its ruptured Macondo well.

BP stopped the gusher on Thursday evening after fitting it with a 45-tonne cap.

Last night, BP’s chief operating officer Doug Suttles said he was ‘hopeful’ that the ruptured well can remain sealed until a pair of relief wells permanently stop the flow.

‘Right now there is no target set to open the well back up to flow,’ he added.

‘Clearly we don’t want to re-initiate flow into the Gulf if we don’t have to.’

BP last month said it was making a £13billion fund available to compensate people affected by the Gulf of Mexico oil spill.

The environmental disaster has enraged the US public and angered the White house, which is also asking difficult questions about BP’s role in a deal between Britain and Libya for the release of Lockerbie bomber Abdelbaset Ali Mohmed Al-Megrahi.

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