BP consults shareholders about possible break up, say reports

BP consults shareholders about possible break up, say reports


BP directors have been canvassing shareholder opinion on whether to break up the oil giant following the problems in the Gulf of Mexico.

According to The Sunday Times, options for a ‘Future BP’ include restructuring the business by selling its refineries and petrol stations as well as scaling back operations in America and bringing engineering in-house.

The radical plans come on top of the sale of around 10% of assets including its stake in the Prudhoe Bay oil field in Alaska.

BP chairman Carl-Henric Svanberg is expected to launch a formal review when the sealing of the ruptured oil well is complete. At the end of last week, the company managed to seal the well for the first time since the disaster started at the end of April. But it emphasised that the solution might not be permanent.

Three top-10 BP shareholders told the paper that the company believed the problems in the Gulf of Mexico will be a ‘transformational’ event.

One said: ‘BP has been a non-growth company for years, and the market has made it pay for this by demanding a 6% to7% dividend yield.

‘Now that the dividend has gone they are starting with a blank sheet of paper and they are thinking about what the new BP will look like.’

Another source told the paper: ‘BP seems to have accepted that it will be a smaller business. It is prepared to consider anything.’

source: citywire.co.uk