Middle East considers BP rescue

Middle East considers BP rescue

Potential strategic investment offers BP a life line; response is awaited.

July 4, 2010 1:55 by Samuel Potter

Financial institutions in the Middle East are considering an investment in beleaguered oil giant BP, reports the National.

The paper cites “informed sources,” who say that proposals for strategic investment from the region have already been communicators to BP advisers in London, and a response is awaited.

“BP knows there is potential support from the Middle East,” one informed source told the paper. Middle East investors would also consider buying key assets from BP, he said.

The paper says they might also give financial backing to any capital raising the oil company might be planning to reinforce its balance sheet. The company has been badly damaged by the cost of cleaning up the catastrophic oil spill in the Gulf of Mexico. Estimates put the clean-up cost as high as US$60 billion (AED 220.37bn).

The National notes that the Financial Times has reported BP’s fears that the company’s low share price makes it vulnerable to a takeover; a strategic investor would be one possible escape route.

BP has a history in the Gulf, having begun life as the Anglo-Persion Oil Company.