BP turns to partners and Middle East investors to help cover spill costs

BP today announced that costs arising from the oil spill disaster in the Gulf of Mexico have hit $3.12bn (£2bn), as reports emerged that the company is looking to both its partners and a number of Middle East sovereign wealth funds to help address the rising clean-up bill.

Documents released by a Senate subcommittee last week revealed BP has written to two of the companies that held a stake in the leaking Macondo well – Anadarko and Mitsui Oil Exploration Company – demanding almost $400m to help cover clean-up and compensation costs.

The letter requested the two companies make the payments within the next 30 days, although both firms have signalled that they are unlikely to take any financial responsibility for the spill until the cause of the explosion on the Deepwater Horizon rig is established.

The news that BP is trying to cover some of the costs associated with the bill came as the Guardian newspaper reported that it is also in talks with the Kuwait Investment Office, which could see the sovereign wealth fund invest around £6bn in a move that would increase its stake in the embattled oil firm from 1.75 per cent to around 10 per cent.

BP declined to comment on the talks, but it is known to be searching for a large strategic investor that would make it more difficult for a rival to launch a successful hostile takeover bid. A source close to the company said that BP was now "talking to a variety of current and potential investors in the Middle East".

The company is also reportedly in talks with a number of rivals interested in buying some of the assets it has said it will sell off over the next two years to help fund its commitment to provide $20bn for an independent clean-up and compensation fund.

The company is working to a tight deadline given that it has to release its financial results and provide an update to shareholders on the costs it faces as a result of the Gulf of Mexico spill on July 27.

Meanwhile, further reports over the weekend suggested that the project to cap the leaking well with a relief well are about a week ahead of schedule.

Officials for BP and the US government are reluctant to confirm that the leak could be capped ahead of the initial mid-August estimate, given the risk that the relief well could still fail and drilling could be disrupted by further hurricanes in the Gulf.

However, the Guardian reported yesterday that the first relief well is about 4.5 metres from the pipe and the engineers working on the project are now using electromagnetic sensors to identify the best point at which to connect the relief well and the existing pipe.

Assuming the relief well successfully connects with the original well, the engineers will then pump mud down the well before sealing the leak with a cement cap.