TEXT OF STORY
Bill Radke: BP’s chief executive Tony Hayward was in Abu Dhabi today, visiting the crown prince of that wealthy emirate. You can understand why Hayward needs money: The company’s clean-up costs for the Gulf oil spill are above $3 billion, and that doesn’t count a $20 billion fund for damages. So Hayward is touring the Middle East and other places, asking rich countries to invest — or keep investing.
Apparently, though, this is not just BP’s problem. It turns out the U.S. Justice Department is taking a special interest in these meetings, as Krissy Clark reports.
Krissy Clark: In polite British fashion, Hayward left Abu Dhabi with a thank you. Right before boarding a plane, he told reporters he was delighted to “meet with our long-term partners and friends.”
But analyst and oil expert Stephen Leeb says the underlying goal of Hayward’s “charm tour” isn’t good manners. It’s good investors, who could buy stock that’s currently a bargain.
Stephen Leeb: Tony Hayward is very very interested, if not desperate, in getting an investor in British Petroleum, for fear it will be a takeover candidate if he doesn’t find a major buyer of some stock.
Any investment could also help BP cover oil spill damages. That’s a good thing. But there’s a bad scenario too, one that the Department of Justice has an interest in avoiding.
Late last month, The DOJ demanded that BP let them know in advance about any plans of asset sales. The department did not return calls for comment, but their request to BP isn’t a normal one. Then again, this isn’t a normal situation, as Rachel Ziemba explains. She’s an analyst at Roubini Global Economics.
Rachel Ziemba: They want to make sure that BP wouldn’t restructure in such a way that it would try to avoid paying these claims. And leave the federal government and the U.S. taxpayer to pay all the costs.
While that’s a far-fetched scenario, analyst Stephen Leeb says it’s not impossible, especially given the Mid-East countries BP has been courting.
Leeb: If the Saudis or Libya got 6 or 7 percent of BP, and in exchange for that had board control of the company, that might be an issue, that really might be an issue, because they would have reverse leverage against us because we really are dependent on their oil.
Meanwhile, the next stop on Tony Hayward’s fire sale tour is Angola.
I’m Krissy Clark for Marketplace.
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