Mideast financial institutions mull investment in BP
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Financial institutions in the Middle East are thought to be considering a possible investment in BP, the oil giant racked by problems caused by the oil spill in the Gulf of Mexico, an English daily of the United Arab Emirates ( UAE) reported Sunday.
As problems continue to hit the company, informed sources said proposals from the region had already been made to BP advisers in London, The National said.
"BP knows there is potential support from the Middle East," a source was quoted as saying, adding that Middle East investors would consider buying key assets from BP.
They might also give financial backing to any capital raising the company might be planning to reinforce its balance sheet, badly damaged by the estimated cost of up to 60 billion U.S. dollars in cleaning up the catastrophic oil spill, the report said.
In London, a BP spokesman declined to comment on the possibility of an investment from the Middle East, according to the newspaper.
BP shares have fallen 50 percent since the rig accident, which claimed 11 lives and has led to the worst environmental disaster in U.S. history, The National said, adding that an investment of 10 billion dollars would buy about 11 percent of BP.
Middle East sovereign wealth funds (SWFs) have a record of support for big western companies in trouble. During the credit crisis, the SWFs of Qatar and Abu Dhabi took stakes in western banks such as Citigroup and Barclays, investments that were welcomed by those companies.
The deals effectively put a "floor" under the companies' share prices and halted further declines, the newspaper said.
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