Question No. 3: Why the decision to sell as much as $30 billion in assets?The deal to sell assets to Apache represented a sale of roughly 2% of BP's production for $7 billion. Hayward provided some simple math on the call, saying that multiplying the $7 billion by four, 8% to 10% of BP's production could be sold. BP projects a daily production rate of 3.5 million barrels. Analysts, notably, Lucas Herman of Deutsche Bank, were concerned about the timing of the asset sales. The Deutsche Bank analyst asked why it had taken an event of this order for BP to review its business and move to a smaller, higher quality business. To some extent, Hayward downplayed the asset sales, saying that BP has periodically looked at accelerating disposals that it has planned to make over a time frame of five years, and the more concentrated asset sale plan is simply something it needs to do and has the opportunity to take advantage of now. "That's just the way the world is. It's something we discussed periodically but never drew the conclusion to do, and now it's not just an opportunity but a requirement," Hayward said. Incoming BP CEO Bob Dudley stressed that a "somewhat smaller company" can create shareholder value going forward by allowing BP to reestablish its position in the U.S. -- though Dudley countered an insinuation that BP might act hastily in the capital markets, even though its sale of assets to Apache did not receive the tag of a "fire sale" from the Street. "We haven't said we will rush back," Dudley said, adding, "look at our performance prior to the incident. The market was recognizing the quality of our portfolios. No one is saying we will rush right back." Dudley also reiterated this point about not being in a rush as it related to potential reinstatement of the BP dividend. The company plans to take up the issue of the suspended dividend after its fourth quarter earnings.
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