Bp 'may Sell Off Petrol Stations'

July 19, 2010

BP is reported to be considering selling off its petrol stations, as tests continued on Sunday to see if a cap to stop the flow of oil into the Gulf of Mexico was continuing to hold.

Directors at the beleaguered oil group are understood to have held discussions with its major shareholders over restructuring the company following the crisis, according to the Sunday Times newspaper.

Options under consideration are thought to include splitting up the group by selling off its refineries and petrol stations, scaling back its US operations and doing more engineering in-house rather than outsourcing it.

The restructuring will come on top of the sale of around 10% of the group's assets, which will be needed to meet the cost of the oil spill, which has so far reached 3.5 billion US dollars (£2.29 billion).

Discussions with shareholders are said to be at an early stage, but they will be used to help decide the direction of a formal strategic review, which is expected to be launched by the group's chairman Carl-Henric Svanberg once the ruptured well is finally sealed.

Meanwhile, tests were continuing today to see if the steel casing of a cap placed over the well is sufficiently strong to shut it off in the long term until relief wells are in place.

Integrity tests on the cap have been taking place since Thursday evening and were due to end last night, but BP decided to extend them for a further 24 hours.

News that the leak was stopped on Thursday helped BP shares soar around 8% higher at one stage on Friday, although wider stock market falls later pared the gains back.

It is thought that the restructuring of BP could leave it a significantly smaller firm, which would focus on exploration in emerging oil regions, such as West Africa and Brazil, and lead to it selling off its less profitable downstream arm.

The downstream business, which is made up of petrol stations and refineries, employs around 51,600 people - more than half of BP's 80,300 workforce - but accounts for just 3% of the company's pre-tax profit.