BP's (NYSE:BP) Dudley Working on Balancing Defense and Offense

Now that BP (NYSE:BP) has finally entered into a stage where crisis management isn't the word used to describe their purpose, CEO Bob Dudley is seen to be working on bringing balance back to the company, as he retains the defensive posture related to the Gulf, while looking for some offense in relationship to growth.

Some of the final steps that need to be taken are to sell enough assets to pay for the estimated $40 billion the company will pay out through the years.

They've committed to raising about $30 billion through asset sales, and so far have sold off close to $14 billion.

Two assets they haven't made a decision on yet include Prudhoe Bay in Alaska, and its Pan American Energy LLC asset in Argentina. Pan American would bring them as much as $9 billion if they choose to go that route.

Part of BP's problem on the defensive side is awaiting the decision on whether or not they'll be designated as being grossly negligent concerning the oil spill in relationship to the Clean Water Act.

How that is determined could result in a liability differential of up to $10 billion.

It seems they're operating under the assumption they won't be paying the high end of the fine, but still need to raise an additional $16 billion or so to prepare for the financial challenges still remaining.

The problem for BP as a company is it keeps them in a defensive posture until they take care of it, so may take care of it sooner rather than later.

They have time as far as the payouts are concerned, but it's more the psychological factor for workers and the leaders of the company, who need to proceed in a way that shows they're going forward, while being sure they don't end up with any new fiasco.

Neglect of either one will hurt BP, and Dudley, from his comments and decisions, shows he understands that and is working hard to bring that about.

BP (NYSE:BP) Shares Should Trade Active Today

BP's (NYSE:BP) shares are expected to trade active today in anticipation and response to their latest quarterly report.

There are no expectations of surprises from BP, which should remain suppressed from the ongoing uncertainty of its overall liability in the Gulf of Mexico oil spill.

Analysts on average are looking for about $1.51 earnings per share, with a range of $1.44 to $1.59 per share from several analysts.

BP closed Monday at $40.77, losing $0.03, or 0.07 percent.

BP (NYSE:BP) Pays $767 Million to Florida So Far

So far in the state of Florida alone, BP (NYSE:BP) has paid out $767 million to individuals, businesses and governments, according to the energy giant.

BP said in a statement, "Of the $767 million BP has paid so far in the state of Florida, $577 million has gone directly to business and individuals through the claims process.

"The next largest amount, nearly $72 million, has gone to those working in the Vessels of Opportunity Program, [a program that] put fisherman and captains to work over the summer helping with oil recovery."

Other major payments made to Florida included that granted to tourism, where "$32 million has gone to help Florida's tourism industry. Several Panhandle communities used the tourism grants to put on weekend festivals. Most recently, Pensacola Beach hosted the De Luna Festival, which was extended a third day because of BP funding," added BP.

Claims continue to be made in Florida, and other Gulf states over the oil spill disaster.

Goldman (NYSE:GS) Says Buy Halliburton (NYSE:HAL), Citing Liability Headlines

Goldman Sachs (NYSE:GS) said investors should buy into Halliburton (NYSE:HAL) based on liability headlines which very likely won't pan out in their view.

Although there are a lot of contradictory stories emerging from the report from the National Commission on the BP Deepwater Horizon Oil Spill, which concluded the cement mud used to seal the Macondo well of BP (NYSE:BP) was unstable, Goldman seems sure Halliburton did what it could to provide a safe seal, and the drop in share price should be considered a buying opportunity.

"The slurry that was actually used on the well was tested, and passed, prior
to being pumped," Goldman asserted.

Goldman reminded clients in their note that "due to the low number of stabilizers that BP chose to use and urged BP to conduct all proper tests (including a cement bond log, which was not done)."

"At the end of the day, BP ran a negative pressure test and accepted the inconclusive results", Goldman concluded.

This seems to be far too optimistic, far too soon, to come to this conclusion, which bears the resemblance of cheerleading rather than a decision based upon objective response to the conditions.

It's not that Goldman may or may not end up being right about Halliburton, it's that it seems too soon to look at this as an opportunity to buy before this part of the narrative plays out.

BP (NYSE:BP) Sells Gulf Assets to Japan's Marubeni

BP (NYSE:BP) to divest of non-core assets to raise capital to pay for its mounting liabilities from the Deepwater Horizon oil spill in the Gulf of Mexico.

This time the oil giant has sold four fields in deepwater areas in the Gulf of Mexico to Marubeni of Japan, for $650 million. This will bring the total amount raised through selling of assets to over $12 billion. BP wants to raise about $30 billion overall to cover itself for existing and potential liabilities.

The specific fields sold are the Merganser, Magnolia, Nansen and Zia fields, which combined produce about 15,000 barrels of oil equivalent per day of oil and gas.

Evidently, BP would have sold these assets whether or not they oil spill happened: "When BP acquired Devon's Gulf of Mexico assets it was clear that these four fields did not fit well with the rest of our business in the region," said Andy Hopwood, vice president for Strategy and Integration.

The deal is expected to close in the early part of 2011.

Pressure Rising to Restore BP's (NYSE:BP) Dividend

BP (NYSE:BP) CEO Bob Dudley is under increasing pressure to restore the dividend of BP, as rivals increase their margin of growth over the oil giant.

This of course must include the increase of the share price of BP in the aftermath of the Gulf oil spill, and the remaining uncertainties as to the level of liability BP will face.

The major unknown continues to be whether BP will be designated as being grossly negligent in the circumstances. At stake is billions in liability.

One major reason for the pressure to restore the dividend is to call the bluff of the company at to their confidence going forward. A dividend is one of those elements confirming the confidence of management concerning the future of a company.

If the dividend isn't restored, shareholders will probably flee the company, opening them up to being taken over, as some rumors have already been circulating about.

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.

Judge Says First BP (NYSE:BP) Trial Starting in 2011

In a hearing on Friday, U.S. District Judge Carl Barbier said the first trial for BP (NYSE:BP) in relationship to the Gulf of Mexico oil spill could be as early as June 2011.

The comments by Barbier were made at a hearing concerning claims filed against BP under the 1990 Oil Pollution Act.

According to the Act, BP and others have an economic cap of $75 million. While BP has stated in the past they would honor claims beyond that amount, recently they've signaled they may pull back on that assertion.

Another trial has been set for February 2012 where it will be determined how much liability, measured by percentage, each company will hold in connection to the disaster.

BP (NYSE:BP) Closes Deal with Apache (NYSE:APA) for Canadian Assets

BP (NYSE:BP) and Apache Corp (NYSE:APA) have closed another part of the $7 billion deal where BP is divesting of assets in the Permian Basin, Egypt and Western Canada, this one being the Canadian assets held by the oil giant. They've already closed on the Texas Permian Basin assets.

The Canadian assets were valued at $3.25 billion, which entailed natural gas projects and some oil.

Proven oil reserves were 224 million barrels of oil equivalent, with production in the first half reaching 46,500 barrels of oil equivalent a day.

About 1.3 million net acres were part of the agreement, which included some unconventional oil and natural gas assets.

The Canadian division of Apache will take over operations on November 1.

BP is divesting of about $30 billion in assets to pay for liabilities connected to the Macondo Gulf of Mexico oil well disaster.

Blowout Preventer from BP (NYSE:BP) Oil Spill Still Sitting Around

One of the key pieces of evidence related to the BP (NYSE:BP) oil spill, the blowout preventer, is still sitting around after being lifted from the bottom of the Gulf of Mexico after the explosion on the Deepwater Horizon oil rig.

Cameron International (NYSE:CAM) produced the blowout preventer which failed to stem the flow of oil and gas as it was supposed to do in these types of situations.

It has been a month since the device was moved to a government facility to be examined, but in its usual incompetence, has done nothing to examine the causes of the failure of the device which is one of the main pieces of evidence in how fines and/or distribution of liabilities will be assessed.

So you have all these lawsuits and claims being made without the blowout preventer having even been examined.

The reason for the delay according to federal officials, is they are waiting for the approval of the procedures they'll use to do the testing. Court records reveal a multi-agency team will make that determination. How long can it take these "brains" to determine something as simple as that?

Testing on the blowout preventer was supposed to have began by October 1, and it's uncertain as to how much more time will be wasted before a determination as to the procedures used will be made.

The device is sitting in a NASA facility in New Orleans.

BP (NYSE:BP) Cooperation Slowing Says Louisiana

According to Louisiana officials BP (NYSE:BP) isn't cooperating as much because the media spotlight is no longer on them as it was.

Noted particularly was the grant from BP that is currently being negotiated over the inspection and monitoring of seafood.

Louisiana Commissioner of Administration Paul Rainwater told the Senate Finance Committee, "There's a lot of frustration on our part that we're not getting the answers that we need."

Requests for a whopping $450 million for the program over a 10-year period were initiated by Louisiana,

Negotiations brought that down to a still significant $173 million. Deputy Commissioner of Administration Mark Brady was annoyed because BP now wants to apply the money on a regional basis rather than solely to Louisiana.

While politicians are asserting this is because of the lack of media attention, more than likely it's more their outrageous money demands which simply can't be met.

BP has already paid Louisiana hundreds of millions in response to the oil spill, and will pay millions more. They've said from the beginning they would pay for any legitimate claims against them; for individuals, corporations, and governments.

The problem with governments is their predatory thinking in terms of taxation and debt-spending. Some, like Louisiana, are acting like BP is the federal government or central bank, which they can arbitrarily get funding from.

All this is about is anger over not getting their own way, and Louisiana has emerged as the whiniest among the states seeking funding.

It seems they have learned this from the Katrina days, and are continuing on with that mentality and practice.

BP (NYSE:BP) Wants Judge to Send Savings-Plan Cases to Texas

BP has asked a panel of judges to send worker lawsuits alleging mismanagement of their retirement savings plan to Texas court.

In court filings lawyers for the plaintiffs stated the lawsuits should stay in Chicago where seven out of eight of them were filed. BP wants them sent to Texas where investor claims related to the Gulf of Mexico have already been filed.

BP lawyer Daryl Libow responded saying, “The important thing to focus on here is the vast overlap in discovery.”

Filed as class actions, workers for BP North America claim they've lost over $1 billion because of the drop in share price of the oil giant. The cases were filed under the federal Employee Retirement Income Security Act. The retirement plan is administered in Chicago, although "Five of the seven members of the employee plan oversight committee are in Houston,” added Libow.

Lawyers for the plaintiffs said in July 9 court papers that “Defendants knew or should have known that investment in the BP stock fund was an imprudent investment for the participants due to BP’s longstanding and blatant disregard of safety reports, warnings, and recommendations necessary to prevent catastrophic disasters.”

Moody's (NYSE:MCO) Maintaining BP's (NYSE:BP) Rating

Moody's (NYSE:MCO) they have no further downgrades for oil giant BP's (NYSE:BP) credit rating, adding they continue to see the outlook for the company as stable.

The company said, "Today's (Friday) rating action concludes the review for possible downgrade of BP's ratings that Moody's initiated on 3 June."

With the oil well permanently plugged, and the liabilities becoming a little clearer and able to be somewhat estimated, the current A2 credit rating will stay in place "under a range of likely outcomes for the ultimate total costs resulting from the oil spill," said Moody's.

That's not to say there won't be future credit pressures as the costs from claims and lawsuits mount up for BP, but the downgrading of several notches has included those factors in those actions Moody's took recently.

In other words, there could be more downgrades in the future, but in the short term the credit rating should remain where it is for the company.

BP (NYSE:BP), Halliburton Battle Heating Up Over Cement

The battle between Halliburton (NYSE:HAL) and BP (NYSE:BP) is heating up as the Justice Department is entering the fray with its plans to test the cement used by Halliburton on the failed oil well.

In BP's report last week the company said the cement used by Halliburton was "likely unstable." That's important because it would result in the shrinking of the cement which would have left gaps which would have allowed the entry of hydrocarbons.

A government commission said, "The Department of Justice is presently working with Halliburton to secure cement evidence from the well and, when that process is complete, the Commission and other investigators will work with them to obtain desired test protocols."

Halliburton claims the BP report has left a lot out of it and was inaccurate, but they haven't offered up what those inaccuracies or omissions were.

Citigroup (NYSE:C): BP (NYSE:BP) Spill Claims Below $20 Billion

Citigroup Inc. (NYSE:C) analyst Mark C. Fletcher said in a note today that last week, incoming BP (NYSE:BP) CEO Robert Dudley said in a meeting last week that the $20 billion set aside to meet claims against the company may be more than is needed.

Fletcher cited Dudley as saying the $20 billion probably exceeds what will have to be paid out.

Concerning the overall cost of the Gulf of Mexico oil spill, Dudley added the $32 billion estimated should be very close to the actual amount of liability faced by the company.

It is also thought the announced assets to be sold will be the parameters for the company, and there probably won't be a need to sell more than those already in play.

Unless there are new developments, the company also should remain intact and not have to be broken up to pay for liabilities.

Claims from states, which aren't included in the $20 billion fund, shouldn't be too high, said Fletcher, which has been confirmed by some claims already submitted to the company.

A spokesman from BP said he wasn't able to confirm Dudley's statements.

Halliburton (NYSE:HAL), Transocean (NYSE:RIG) Blast BP (NYSE:BP) Report

Not long after the contents of the BP (NYSE:BP) report on the causes which led to the explosion on the Deepwater Horizon oil rig, Halliburton (NYSE:HAL) and Transocean (NYSE:RIG) blasted the report.

The general conclusion of BP was the blame for the failure was spread across 8 different situations, all of which led to the accident. Both Transocean and Halliburton were cited as part of that failure.

Transocean who has continually said BP was "irresponsible" in the situation, said the BP report was "self-serving." Halliburton said the report was far from completed, and had "substantial omissions and inaccuracies."

What this is all about of course is liability, and since BP has been held almost totally responsible, if others are identified as having failed in their part in any way, BP will probably be collecting money from them to help pay for the liability costs.

The companies would also probably have an increased series of lawsuits instigated against them.

This is only the first word concerning the causes of the event, and it'll take some time to sort out and see how accurate the BP report is considered, and if others will share more in paying for it.

BP (NYSE:BP) Raises Assets Sale Target to $40 Billion

With mounting liabilities, BP (NYSE:BP) has reportedly increased its asset sale target from about $30 billion to $40 billion, according to The Sunday Times newspaper.

There is a double-edge sword to the selling of assets by BP, as while they are raising capital to take care of immediate liabilities, they are losing production, which ultimately leads to loss of revenue and profits.

Estimates are after assets sales production will decrease by close to 8 percent. It's uncertain how much that'll increase with an additional $10 billion in asset sales added to the final amount, although if they're similar to estimates based on $30 billion, they could be as high a $11 to $12 billion in lost production, depending on the assets sold.

Although the former talks with Apache over the 26 percent stake BP has in the Prudhoe Bay oil field in Alaska, fell apart, reports are Apache (NYSE:APA)is back in talks again with BP about acquiring at least a portion of the asset, while Occidental Petroleum (NYSE:OXY) has also been named as a potential suitor.

BP (NYSE:BP) Being Shorted by Bill Ackman

Bill Ackman, manager of the Pershing Square Capital Management fund, said he's shorting the debt of BP (NYSE:BP) using credit default swaps.

According to Ackman, he believes the damage BP has done to its reputation in the U.S. keeps them from being able to "operate effectively" in the U.S., where they have their largest presence.

Ackman also said acquiring the credit default swaps was cheap, especially because of the huge legal liabilities they face, and the uncertainty as to how much they'll end up costing the oil giant.

Credit default swaps are a type of insurance used to protect a company against defaulting on its debt.

BP (NYSE:BP) Ends Trading Session at $40 A Share

BP (NYSE:BP) ended Tuesday's trading session at exactly $40 a share, continuing their incremental move upwards, as more clarity in reference to their overall liability in the Gulf oil disaster emerges.

Among the integrated major energy companies, BP led the way for the trading day, gaining $0.58, or 1.47 percent.

BP also launched their "static kill" efforts at about 4:00 PM EDT Tuesday, after fixing a leak in their hydraulic system.

Teams also continue to scour the Gulf states to determine the extent of damage to wetlands and other related habitats and wildlife. So far it is far less than originally believed, which is good news for BP.

The Gulf has also been found to be far more resilient in taking care of itself, as little oil remains after evaporation and microbes, which in the case of the microbes eat the oil as dinner.

Warm waters in the Gulf contribute to the propagation of the microbes, which the increased amount of oil contributed to their expansion.

The dispersant used by BP also helped tremendously in breaking down the oil to more manageable size for the microbes, all of which has contributed to the far lower than estimated damage to the region.

Anadarko (NYSE:APC) Tells BP (NYSE:BP) Won't Pay Oil Spill Bill

Even though Bp (NYSE:BP) continues to send their partner in the Macondo oil well, Anadarko Petroleum (NYSE:APC), bills for the Gulf oil spill, Anadarko continues to tell them they aren't going to pay anything because it was recklessness on the part of BP which led to the disaster.

Anadarko has a 25 percent stake in the Macondo well, and Japan-based Mitsui has a 10 percent stake, with BP holding the remaining 65 percent of the project.

So far the liability Anadarko has from BP's viewpoint is over $270 million.

According to Anadarko spokesman John Christiansen, he said on Friday that the company let BP know there would be no payment coming their way.

The agreement between the two companies does show Anadarko would have to pay for 25 percent of the costs.