BP Plc is likely to look at oil and gas fields when considering acquisitions rather than rival companies, Chief Financial Officer Byron Grote said.

“If you look at the asset acquisitions that we’ve made in recent times
they’ve tended to reinforce gaps that we had in our upstream portfolio,
and I want to underscore assets, not companies,” Grote said in an
interview in Oslo yesterday. “We have the balance sheet capability to
make inorganic moves if we see fit.”

BP is already the biggest oil and gas producer in the U.S. Chief
Executive Officer Tony Hayward said last month the company would like
to acquire more assets in Brazil, while TNK-BP, its Russian subsidiary,
entered a joint venture for Venezuela. BP had $8.3 billion in cash and
cash equivalents on its balance sheet at the end of last year.

The CFO said London-based BP would not be seeking to raise as much debt
through the bonds markets in 2010 as it did last year. The company
issued about $11 billion of bonds last year, press office spokeswoman
Sheila Williams said.

“We were very active in the bond markets last year, we exited the year
with a lot of cash, so our activity would certainly be considerably
less than it was in 2009,” Grote said.

TNK-BP, BP’s Russian venture, may borrow “a little bit more” this year
to help refinance $1.5 billion of debt due, the company’s Chief
Financial Officer Jonathan Muir said in an interview yesterday. The
company sold $1 billion of dollar notes last week.

New Projects

Exxon Mobil Corp., the largest U.S. company, agreed in December to
acquire XTO Energy Inc. for its gas reserves and expertise in tapping
rock formations. At $28 billion, it’s the company’s largest acquisition
since Mobil in 1999.

BP’s output rose 4 percent to 3.998 million barrels of oil equivalent a
day last year as it ramped up operations in the Gulf of Mexico. The
company plans to start 10 major oil and gas projects this year and next
to boost production, and said it will maintain spending on investment
projects at $20 billion this year.

BP’s adjusted loss from businesses outside of oil and gas production,
refining and marketing widened to $2.3 billion last year, from $1.2
billion in 2008, partly due to weaker margins for its shipping and
solar business, according to results earlier this week.

BP expects to lose about $1.6 billion this year in the division
including solar energy and shipping, averaging around $400 million a
quarter. The company is not considering divesting its assets in the
division, Grote said, adding that the company had improved operations
in the unit as it was reducing its loss from $1.8 billion in 2009 by
cutting corporate costs.

‘Very Weak’

“Shipping rates are still very weak and the price of photovoltaic
panels, or modules, is still very weak and we don’t see that improving
in the course of 2010,” Grote said. “We’re investing over $1 billion a
year in various alternative energy activities. We’re investing in them
not for today but because we believe in those businesses for the longer
term.”

Hayward on Feb. 2 said his company will push the oil and gas service
industry “very hard” to cut costs, while Chief Executive Officer Andrew
Gould of Schlumberger Ltd., the world’s largest oilfield-services
provider, yesterday said negotiations with producers to cut prices were
over.

“It should be an everyday activity, trying to find out ways to more
efficiently acquire goods and services from third parties,” Grote said.
“But there are occasions when this can be done to create win-win
situations by approaching it in a more of a joined up partnership way,
you can find ways to reduce overall costs without reducing the margins
of service providers.”

Grote said costs in some areas of the service industry were continuing
to go down, while others had flattened and some were gaining.

Source: Bloomberg

Search to find what you want

• BP: Declining Contango makes it less profitable to store oil

    BP Plc Chief Financial Officer Byron Grote said that the current contango in oil markets “doesn’t offer particularly interesting opportunities” for trading.

• Aramco and Dow expect to save up to $ 4b on joint petrochemical unit

    Saudi Aramco and Dow Chemical expect to save around $4 billion on their joint petrochemical complex as slowing economic activity cuts project costs, the Al Hayat newspaper reported Wednesday. The estimated cost of the plant was at least $20 billion before reduction, Al Hayat said. The fall was due the global

• EU condemns U.S. 100pc maritime law as too expensive scan

    A report from the European Commission (EC) has criticised the 100 per cent scanning demands for US-bound sea containers by July 1, 2012 as too far too costly. EC commissioner Algridas Semata said the US legislation would “require sizable investments, increased transport costs and entail massive welfare losses for no

• South Koreas Hanjin Shipping pound Q3 net loss of U.S. $ 362 million

    Hanjin Shipping Co., Korea’s largest shipping line, said that it posted a loss in the third quarter on falling shipping rates. The company posted a net loss of 421 billion won ($362 million) in the July-September period, compared with a profit of 31 billion won a year earlier.

• JSW Steel Swings to Profit in the third quarter on Demand

    JSW Steel Ltd., India’s third- biggest producer, returned to profit in the third quarter from a loss a year ago, boosted by demand from builders and carmakers.

• Xstrata would use sales

    Has Xstrata gone far enough to slash its debt burden? The copper-focused miner raised $5.9 billion from shareholders in March, most of which went towards paying down debt, but the company is still carrying a $13 billion debt pile in an uncertain trading environment. This could explain why Xstrata is

• Xstrata would use sales

    Has Xstrata gone far enough to slash its debt burden? The copper-focused miner raised $5.9 billion from shareholders in March, most of which went towards paying down debt, but the company is still carrying a $13 billion debt pile in an uncertain trading environment. This could explain why Xstrata is

• Xstrata would use sales

    Has Xstrata gone far enough to slash its debt burden? The copper-focused miner raised $5.9 billion from shareholders in March, most of which went towards paying down debt, but the company is still carrying a $13 billion debt pile in an uncertain trading environment. This could explain why Xstrata is

• India s Tata Steel sees costs by $ 140-150/tonne

    India’s Tata Steel, the world’s No. 8 steelmaker, expects costs to rise between $140 to $150 per tonne, once new annual contracts for raw material supplies are signed, Managing Director H.M. Nerurkar said

• Shell, BP Delay Projects, anticipating lower costs, Moody \ u0026 # 39; s Says

     Royal Dutch Shell Plc and BP Plc, Europe’s biggest oil companies, are putting some final investment decisions on hold in anticipation that project costs will drop, said Moody’s Investors Service Ltd.  Shell and BP said last week that cost savings this year will be limited because they are locked into contracts

• Gazprom ups 2010 investment to $ 28 billion-source –

    Russian gas giant Gazprom will increase its investment programme next year by 5 percent to 802 billion roubles ($27.94 billion), a source close to the company told Reuters on Thursday. The investments will rise from 761.5 billion roubles earmarked for this year, of which 483.5 billion was classed as capex.

• Venezuela s state oil company debt jumped by 42 percent

    State-owned oil company Petroleos de Venezuela (PDVSA) saw its debt jump 42 percent in 2009, compared to a year earlier, climbing to 21.4 billion dollars, according to official figures. In 2008, PDVSA’s debt was 15.09 billion dollars, but in the early months of 2009 the energy crisis, along with falling

• Dana Gas profits jump 69% on new discoveries, Sales

    Dana Gas PJSC, the Middle East’s largest regional private sector natural gas company, on Monday reported a 69 per cent jump in net profits reaching Dh 436 million from the sale of hydrocarbons reaching Dh1.28 billion, the company said in a statement. “A sale of 10 per cent of the

• Trans Ocean Ltd. Reports Second Quarter 2009 Financial Results

     Transocean Ltd. yesterday reported net income attributable to controlling interest for the three months ended June 30, 2009 of $806 million, or $2.49 per diluted share, compared to net income attributable to controlling interest of $1.065 billion, or $3.31 per diluted share for the three months ended June 30, 2008. Revenues for

• Robust two-year forecast for Maersk

    Danish financial house Danske Market Equities is forecasting the parent company of ocean carrier Maersk Line will return to profitability in 2010 due largely to better container shipping freight rates. DME is forecasting all-in freight rates will increase 16 percent in 2010, and is projecting net profit of $172 million