THE PATIENT IS MORE ALIVE THAN DEAD

The collapse of British oil giant BP predicted by analysts has been postponed. The company has been preoccupied by efforts to eliminate the oil leak in the Gulf of Mexico and has announced its own plan to overcome the difficult economic situation.

In particular, the company intends to stop the oil leak at the site of the Deepwater Horizon platform in the Gulf of Mexico, which sank after an explosion, by 27 July.

In addition, it is believed that the company will use a special vessel capable of collecting up to 500,000 barrels of oil per day from the sea surface; this is hundreds of times faster than the equipment currently being used.

On the other hand, the company's management is also trying to keep BP afloat. BP CEO Tony Hayward has visited a number of countries in which the company has large interests, including Azerbaijan, Russia and several Middle Eastern and Arabic countries.

BP is looking for investors in Arabic countries who would be interested in buying a 5-10 per-cent stake in the company, which would help it to avoid a hostile takeover by competitors like Exxon, Total, Chevron, Shell and others.

Experts believe that the company needs $50-60 billion to compensate for the damage caused by the oil spill.

By the time our magazine went to press, the company had already spent more than $3.5 billion on eliminating the consequences of the accident and trying to stop the spill.

To collect the necessary funds, the company has announced a plan to sell some of its assets, primarily in Argentina, Venezuela, Colombia and Vietnam, for which it expects to receive $10-15 billion.

The company also intends to place bonds worth $10 billion and apply for loans amounting to $10-20 billion.

A number of Arabic funds in Saudi Arabia, Kuwait, Libya and the UAE have expressed interest in the company's shares. According to current estimates, this would mean the sale of 5 to 15 per cent of the company, yielding from $4.5 to $13.5 billion.

However, the question of selling company shares could face opposition from the US administration, which has declared a requirement to agree nominations of new shareholders. Although this is unconventional, it is understandable - almost 40 per cent of BP shares belong to American shareholders, while the company itself is fully integrated into the energy infrastructure of the United States.

In turn, the British government is considering nationalizing the company, according to The Times. This is an option to prevent bankruptcy or a hostile takeover.

According to The Wall Street Journal, Prime Minister David Cameron and Energy Secretary Chris Huhne will discuss BP's future with US authorities during their visit to Washington on 20 July.

BP is also an exceptional case for the British government, as the company is the largest taxpayer, paying $10 billion annually. In addition, many British pensioners own shares in BP. Of every seven pounds of dividends paid to people of retirement age, one pound comes from this company.

Apparently, however, the company will not need such a bailout. The markets have reacted positively to reports about the BP management's plans to find the necessary funds. Shares in the oil giant demonstrated stable growth in the first half of July, increasing daily by 3-5 per cent. As a result, the company's capitalization, which had halved since April this year to $90 billion, increased to $95 billion in a week. Shareholders' confidence was also boosted by a statement that the company would not resort to further share issues to raise funds for disaster recovery.

In Azerbaijan, BP not only has no intention of selling its assets, it is actually expanding its presence here. As noted above, BP CEO Tony Hayward also visited Azerbaijan as part of his tour. At first glance, it might seem that the purpose of the visit was to discuss the possibility of selling assets in Azerbaijan. And BP has a lot of assets here! These include the development of the Azari-Ciraq-Gunasli and Sah Daniz deposits and the Baku-Tbilisi-Ceyhan and Baku-Tbilisi-Erzurum pipeline projects.

But even on purely economic grounds, the sale of assets in Azerbaijan would be inefficient because the bulk of investment in projects has already been made and they can only make profit.

But, at such a difficult time, BP took another step towards a new contract in Azerbaijan.

"BP is a supporter of significant investment in Azerbaijan's economy," Tony Hayward said in Baku before SOCAR and BP signed an Exploration Agreement on the basic principles of the commercial exploration and development of the promising Asiman-Safaq block in the Azerbaijani sector of the Caspian Sea, with a prospective 500 billion cubic metres of gas reserves.

"We are pleased to sign an agreement with SOCAR today and advocate more investment in the economy of Azerbaijan", said Hayward. The contract for development of the field is expected to be signed this autumn, with equal, 50-per-cent stakes for BP and SOCAR.

At a meeting with Azerbaijani President Ilham Aliyev, he reiterated the company's commitment to Azerbaijan and its intention to continue in successful cooperation with the government and SOCAR.

At his meeting with the Azerbaijani leader, Hayward also noted the importance of the Azari-Ciraq-Gunasli, Sah Daniz, Baku-Tbilisi-Ceyhan and South Caucasus Pipeline (Baku-Tbilisi-Erzurum) projects for Azerbaijan, the region and the global energy market. He stressed the importance of continuing exploration work in the Caspian Sea for the energy future of the region.

Referring to Sah Daniz, Hayward said that full development of this field is one of the most important projects for BP and, as its operator, the company intends to accelerate implementation.

The Azerbaijan International Operating Company (AIOC), which is developing the Azari-Ciraq-Gunasli block of deposits, also recently announced the signing of six major outsourcing contracts, worth $814 million, as part of the Ciraq oil project.

Shareholders of the Azari-Ciraq-Gunasli project authorized the commencement of construction work within the framework of the Ciraq oil project on 9 March 2010; it is planned to extract 360 million barrels of oil as part of this project. This will require the investment of $6 billion, of which $4 billion will be allocated for the construction of facilities, installations and a programme to drill advance boreholes, and an additional $ 2 billion for the drilling of wells from the platform during oil extraction.

Even in conditions of austerity, BP, the AIOC's main shareholder with a stake of 39.7 per cent, is not suspending the project and is continuing to invest, because it is confident in the profitability of Azerbaijani oil projects.