Grote's response to Rigby involved both the political reality of the oil spill situation and the financial threat to BP of a situation that seemed to be worsening on a daily basis. "We believe we got the opportunity for the first time to have a constructive dialogue with the President. As the frustration has grown with the inability to cap the flow, there has been increasing concern about how BP was going to fulfill its obligations to all of those affected by incident, and the rhetoric has had some fairly dramatic affects on BP, both debt and equity markets observable for one and all."
Grote continued, "Much of the reaction was caused by deep uncertainty of how issues would be resolved. ... To have the chance for the chairman and CEO to sit down with the President and carve out an agreement that provides greater comfort and clarity and a framework consistent with the intention BP has had all along, allows our business to progress effectively," Grote said.
Specifically, the BP CFO said that being allowed to stage injections into the escrow account, "I hope provides greater comfort to debt and equity markets that there is not a very large and significant impact on BP coming in the immediate time frame."
The cash injections into the escrow account will be $5 billion per year over the next four years -- $3 billion in the third quarter 2010, $2 billion in the fourth quarter, and then $1.25 billion per quarter after that.As for asset sales to be made by BP, Grote said that BP was exploring a range of non-core assets that are not strategic to its longer-term success, primarily from its upstream asset base. Grote also noted the potential to spin off U.S. assets and derive an independent valuation.
Select the service that is right for you!COMPARE ALL SERVICES
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
- Real Money + Doug Kass Plus 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV