Friday, 22 November 2019

BP says taking $2-3 billion hit on asset disposals

LONDON: British energy major BP said that it will take a charge of $2-3 billion (1.8-2.7 billion euros) on the back of major asset sales including its Alaska division. The company said in a statement that it would take the hit in its third-quarter earnings, which are scheduled for publication on October 29.

“BP announced that it now expects to deliver divestment proceeds and announced transactions totalling around $10 billion by the end of 2019, comprising the majority of its two-year divestment programme planned to complete by the end of 2020,” it said in a statement. “The $5.6 billion sale to Hilcorp of BP’s Alaskan business is the largest single agreed transaction and is expected to complete in 2020.

“As a result of the agreed divestments, BP expects to take a non-cash, non-operating, after-tax charge of $2-3 billion in its third quarter 2019 results.” The news comes one week after BP announced that Chief Executive Bob Dudley, who oversaw the energy giant’s response to and recovery from the devastating Gulf of Mexico 2010 oil spill disaster, will leave next year.

Under Dudley in 2018, BP bought mining giant BHP Billiton’s US shale oil and gas operations in a landmark $10.25-billion deal that energised the company’s output. He also embarked upon the $10-billion divestment programme in order to finance the blockbuster purchase.

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