Daily Telegraph: The US has imposed sanctions on an Iranian oil company working with BP in the North Sea – listing it as a body that “persons should not do business with”.
The Daily Telegraph
The US has imposed sanctions on an Iranian oil company working with BP in the North Sea – listing it as a body that “persons should not do business with”.
By Rowena Mason, Energy Reporter
The move will be seen as further evidence of the fracturing relationship between the British energy giant and the US administration, following the oil spill in the Gulf of Mexico.
President Obama has suggested BP’s chief executive should be sacked, made the company create a $20bn (£13.5bn) compensation fund and forced it into suspending the dividend after the April 20 accident.
US officials this week added the Iranian Oil Company UK to its banned list. BP has a 50-50 joint venture with the business that US authorities now allege is “owned or controlled by the Government of Iran”.
The joint venture is at the Rhum field, off the coast of Scotland – a £350m gas field, which has 800bn cubic feet of recoverable reserves. BP confirmed it has a joint venture with Iranian Oil Company UK, but declined to comment further.
American officials refused to say how the sanctions would affect BP. Although the rules apply only to transactions involving “US persons”, the joint venture partnership is likely to further strain diplomatic relations between the US and the embattled British oil company.
It is now 61 days since the Deepwater Horizon rig exploded and sank, triggering a catastrophic leak off the coast of Louisiana. BP’s share price fell a further 1pc on Friday to 357.45p, after Moody’s, the rating agency, downgraded BP by a further three notches to A2 from Aa2.
“Moody’s updated assessment is that the spill will have a sustained negative impact on the group’s free cash flow generation and overall financial profile for a number of years.” It followed cuts from Fitch and Standard and Poor’s earlier this week. In other developments:
• BP hired investment bank Standard Chartered to help sell off $10bn of assets. Analysts suggested that BP could sell more of its remaining North Sea production under its programme of disposals.
• BP’s chairman Carl-Henric Svanberg deflected questions about whether his chief executive, Tony Hayward, is doing a good job, in an interview with Sky News. Earlier, Mr Svanberg told a Swedish newspaper: “To change CEO now would be a bit like being in the middle of the ocean in a storm and starting to discuss the suitability of the captain.”
• Reports emerged that BP is looking at multiple sources of alternative debt financing, as its five-year credit default swaps – the cost of insuring against non-payment of debt – continued to rise. The company is reportedly seeking $1bn in loans from seven banks for up to $7bn
• John Kennedy, the Treasurer of Louisiana predicted that clean-up costs could top $100bn in the long-term. This suggests that the $20bn compensation fund negotiated by US President Barack Obama would not be adequate to cover all the claims against BP.
• A group of Gulf coast residents sued BP and the maker of its dispersant used to break up the spill, claiming the chemical is four times more toxic than the oil itself.
However, the company received a boost from new figures showing that up to 25,000 barrels per day is now being collected from the leak.
Estimates suggest between 35,000 and 65,000 is now coming out of the well – up to eight times more than the long-standing estimate of 5,000 barrels per day. BP also reported that the first of two relief wells being drilled to plug the is now within 200 feet of the blown-out leak. The operation is ahead of schedule and BP predicts that the well will be plugged by mid-August.