UPDATE: BP CEO Intensifies International Charm Offensive

7th Jul 2010 18:27

(Updates with airport officials in Abu Dhabi saying Hayward was prepared to board a flight for Angola) By James Herron and Nour Malas Of DOW JONES NEWSWIRES LONDON (Dow Jones)--BP PLC (BP, BP.LN) Chief Executive Tony Hayward intensified Wednesday what one BP investor described as an international "charm offensive" aimed a reassuring key local partners and encouraging deep-pocketed investors to see the value in BP's beaten-down share price. Hayward met with Abu Dhabi's powerful Crown Prince Mohammed bin Zayed Al Nahyan during a visit to the oil-rich sheikdom Wednesday. During the visit he said that he would be happy to see the city state's sovereign wealth fund buy a stake of up to 10% in BP, a person with knowledge of the situation told Zawya Dow Jones. BP spokeswoman Sheila Williams declined to comment on the details of any meetings, but said Hayward met with "key business partners as well as staff" in Abu Dhabi to discuss the company's day-to-day business and give them "the opportunity to raise any concerns about BP." Since leaving the U.S. under a cloud following harsh criticism of his handling of the oil spill in the Gulf of Mexico, Hayward has traveled the world to reassure governments and business partners that BP can operate as normal in their countries--and that the company is not planning a fire sale of key assets--despite the tens of billions of dollars in potential liabilities faced by the company. Hayward visited Russia late last month, where he pledged to Igor Sechin, Russia's top energy official, that BP had no intention of selling its 50% stake in TNK-BP Ltd. (TNBP.RS) and its small stake in state-controlled OAO Rosneft (ROSN.RS). In Azerbaijan Tuesday, Hayward "reiterated BP's commitment to Azerbaijan and to the continuing successful cooperation with the government and (Azeri state oil company) Socar," BP said in a statement. All three countries are crucial for BP. Of BP's total oil production in 2009, Russia provided 33%, Abu Dhabi 7.1% and Azerbaijan 4%, according to the company's annual report. The BP spokeswoman declined to say whether Hayward will visit more countries. A person familiar with Hayward's itinerary told Dow Jones Newswires it was likely to take in other strategic areas such as Egypt or Angola in the near future. Airport officials in Abu Dhabi on Wednesday said Hayward was prepared to board a flight bound for Angola. Speculation that sovereign wealth funds from oil-rich Middle Eastern states are ready to buy big stakes in BP has boosted its shares in recent days. Libya's top oil official, Shokri Ghanem, said Monday that BP is a bargain and recommended the nation's sovereign wealth fund invest in it. However, a member of Kuwait's top oil policy committee moved Tuesday to quell speculation his country would increase its stake in BP. "The investment authority in Kuwait already has a stake in BP and has lost a considerable amount on the book value," Imad Al Atiqi, a member of Kuwait's influential Supreme Petroleum Council, told Zawya Dow Jones. If a fund like the Abu Dhabi Investment Authority were to build up a sizeable stake in BP, it would amount to a public vote of confidence in the company. BP has ruled out issuing new shares, so the stake purchase would not give the company fresh capital. And it is questionable whether such a move could block potential takeover approaches--some analysts have speculated that PetroChina Co. Ltd. (PRT, 0857.HK) or Exxon Mobil Corp. (XOM) might view BP as an attractive target at current share price levels. Under U.K. Takeover Panel rules, a predator can effectively take control of a company with an offer that wins approval of half its shareholders, and it could force a hold-out to sell if its offer wins acceptance from 90% of other investors. On the other hand, BP may view a stake of more than 10% by a Mideast sovereign wealth fund as unwelcome. The company objected strongly when Kuwait amassed a stake of more than 20% in the aftermath of the 1987 stock market crash. Kuwait was subsequently forced to sell down its stake to less than 10% after an investigation by the U.K. Competition Commission--then known as the Monopolies and Mergers Commission--decided that the higher stake would give Kuwait undue influence over BP's strategy and decision-making. However, the prospect that a deep-pocketed investor could acquire a sizeable stake in the company by buying existing shares on the open market has lifted BP stocks. BP shares traded at 363 pence at 1421 GMT Wednesday, up almost 20% from a closing price of 303 pence on June 29--a 14-year low. Despite the boost, some BP investors are skeptical that many people would be willing to sell at the current price, which remains at a little over half its level before the oil spill. "Investors shouldn't be looking to sell at this point when the relief well is so near," said Ivor Pether, a fund manager at Royal London Asset Management. "We added to our holding when [the share price] was at GBP3." -By James Herron and Nour Malas, Dow Jones Newswires; +44 (0)20 7842 9317; [email protected] (Andrew Critchlow in Dubai contributed to this article.) (END) Dow Jones Newswires July 07, 2010 13:27 ET (17:27 GMT)