In its latest effort to raise cash for the settlement of US Gulf of Mexico liabilities, British Petroleum has decided to sell the Canadian Natural Gas business. The assets up for sale include storage and processing plants and pipeline.
The company expects proposals from the Calgary Provident Energy and different infrastructure funds, and has employed Credit Suisse to complete the deal.
The US Apache Corporation bought some of BP’s Canadian oil and gas businesses last month for £4.43 billion. BP has managed to raise £13.3 billion till now by selling its worldwide assets.
The US government is already suing BP holding it responsible for the Gulf oil spill. However, BP officials are cautiously optimistic that the US government may not sue BP for gross negligence which may cost the company a further £13 billion in fines.
The liability bill already looks scary; fines amounting to £2.5 billion, clean-up costs of £6.3 billion and compensation of £13 billion for victims of the spill.
Analysts believe that gross negligence on the part of BP will be difficult to prove and fines should not exceed £2.5 billion or £3 billion. BP also hopes to get back part of its £12 billion compensation package.
BP is contemplating legal action against the rig contractors, Mitsui and Anadarko and has already fined them £2.8 billion. However, both the contractors have refused to pay.
US laws stipulate a fine of £1,100 for each leaked barrel which may go up to £4,300 if gross negligence is proved. Hence the gross negligence aspect is critically important.
A recent report by BP’s Group Head of Safety Mark Bly, not surprisingly blames the disaster on ‘a sequence of failures’ caused by ‘mechanical failures, human judgments, engineering design, operational implementation and team interfaces’. The good news is that the Presidential Commission seems to have accepted the report partly.