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BP Sells 4 Gulf Of Mexico Fields To Marubeni To Pay For Oil Spill

JANE WARDELL   10/25/10 10:06 PM ET   AP

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LONDON — BP Chief Executive Bob Dudley accused some politicians and the media on Monday of being too hasty to pin all the blame on his company for the devastating Gulf of Mexico spill – and emphasized the need for deep-water drilling.

In his first major public speech since taking the top job, Dudley also said BP would not pull out of the United States – and that the U.S. needs a company with BP's resources to meet its vast energy needs.

Dudley delivered a speech whose mood hovered between firm and penitent, seeking to make clear that BP was learning every lesson possible from the disaster. He stressed that he also has met with experts from other hazardous industries, including the nuclear and chemical industries, as part of the company's focus on improving safety.

"We were certainly not perfect in our response, but we have tried to do the right thing," Dudley added. Before becoming the first American to lead the British oil company on Oct. 1, Dudley was in charge of BP's spill response efforts in the Gulf.

U.S. lawmakers have widely blamed BP for the disaster.

On Monday, Dudley said many parties, including the media and rival oil companies, were guilty of "a great rush to judgment" before all the facts were known.

"I watched graphic projections of oil swirling around the Gulf, around Florida, across and around Bermuda to England – these appeared authoritative and inevitable. The public fear was everywhere," he said.

The company's own investigation shared the blame between BP, rig owner Transocean Ltd. and contractor Halliburton Co.

But former EPA Administrator William K. Reilly, co-chair of an independent oil spill commission investigating the rig explosion, suggested Monday that BP fed the fear and mistrust by initially minimizing the impact of the spill.

In an interview with The Associated Press in New Orleans, Reilly said the company shouldn't downplay the significance of "what occurred and what happened on their watch and what was their responsibility to prevent."

The U.S. government could fine BP up to $21 billion for the spill, on top of a $20 billion disaster fund that the company has committed itself to. A bill that passed in the U.S. House of Representatives would prevent companies like BP that have a poor safety record from getting new offshore permits. A Senate bill that was eventually tabled didn't contain a similar provision.

Speaking at an annual conference of Britain's leading business lobby group, Dudley stressed BP's commitment to the United States despite the ongoing political and public fallout and talked up the company's ability to withstand the expected financial hit from the spill.

Earlier Monday, BP announced it has sold its stake in four mature oil and gas fields in the Gulf of Mexico to Marubeni Oil and Gas for $650 million (euro466 million). The fields were part of a recent acquisition of Gulf assets from Devon Energy and were considered nonessential. BP is hoping to raise $30 billion from selling assets and already has raked in almost $9 billion from the sale of properties in Egypt, Canada, the U.S. and Colombia.

Dudley argued that deepwater drilling is necessary despite the dangers. He cited predictions that the world could be consuming 40 percent more energy than today by 2030. Deepwater drilling is projected to grow to account for 9 percent of total oil supplies in 2020, from 7 percent currently.

He said BP is "one of only a handful of companies with the financial and technological strengths to undertake development projects in these difficult geographies and it can be done safely."

BP continues to make plans for further drilling projects in the Gulf of Mexico. Rig owner Pride International Inc. said BP has leased two of its deepwater rigs. One of those rigs is already in the Gulf and another is on its way. Pride spokeswoman Kate Perez said it's unclear what projects are in store for those rigs – they still could be moved out of the Gulf.

BP relies on the Gulf for about 10 percent of its total oil and gas production.

President Barack Obama recently lifted a moratorium on new deepwater drilling in the Gulf, imposed after the April 20 explosion that kicked off the worst oil spill in U.S. history. Obama is due to announce further recommendations under a presidential commission in the coming months.

Dudley, who took over from gaffe-prone former CEO Tony Hayward early this month, also sought again to reassure business leaders that the company has the financial strength to shoulder the anticipated heavy costs of the Gulf spill.

Dudley said he has spent much of his time since becoming CEO traveling the world to visit BP's partners.

"Our underlying operational and financial performance is sound," he said, stressing the company's wide geographical reach.

Analysts responded with optimism.

"That's what the company needs, it needs a determined champion not an apologist," said Nick McGregor, an analyst at Redmayne-Bentley Stockbrokers. "He's going to want to go forward and leave the apologies ... His job is to acknowledge the past, not continuously apologize for it."

Dudley dismissed suggestions that the United States might turn its back on the company, or that BP could voluntarily leave the United States.

"I am confident that neither of these propositions is true," he said. "Contrary to what is sometimes said, BP is not widely seen over there as 'British Petroleum': we're part of the American community."

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Associated Press writers Chris Kahn in New York and Brian Skoloff in New Orleans contributed to this report.

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Filed by Travis Donovan  |