Tuesday, October 19, 2010

BP (NYSE:BP) Hands Off Babysitting Chavez to Russians

While the divestiture of BP (NYSE:BP) assets in Venezuela are part of the strategy of the oil giant to raise $30 billion to pay for mounting liabilities from the Gulf of Mexico oil spill from the explosion aboard the Deepwater Horizon oil rig, a secondary benefit comes with it: No longer having to deal with the volatile and unpredictable Hugo Chavez.

Even though BP is a 50-50 partner in TNK-BP, their joint venture with a group of Russian billionaires, they'll retain benefits of the assets, but not have to deal with, for the most part, the operational headaches that come with doing business in Venezuela.

That doesn't include the $1.8 billion BP raised from the deal to serve its liability goals.

Another nice benefit in this is if the business in Venezuela is taken over or fails for some reason, BP already enjoys the $1.8 billion that came with the deal, putting them ahead of the game.

Overall it's a smart deal for them.

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