BP approaches well "kill" as bid rumours refuse to die

BP announced yesterday that it expects to finally "kill" its ruptured well in the Gulf of Mexico within the next fortnight after successfully replacing the well's damaged blow out preventer over the weekend.

The news prompted fresh speculation that the company could face a hostile takeover bid once the Macondo well has been permanently sealed.

The company announced yesterday that the damaged blow out preventer was removed on Thursday with the replacement device successfully installed the following day. The damaged blow out preventer was then brought to the surface on Saturday and is now in the custody of the US Department of Justice as evidence in its ongoing investigation into the explosion on the Deepwater Horizon rig.

The recovery operation means that the project to make the well safe has entered its final phase and BP confirmed that the drilling rig that will complete the relief well will soon be in position. Once the relief well is complete the company will pump heavy mud and cement into the well in a so-called "bottom kill" operation. The well has been capped since July, but the final operation is expected to make the well completely safe, removing the risk of future leaks.

Reports over the weekend suggested that the capping of the well will reignite speculation that the company could face a hostile takeover bid.

At one stage following the accident, BP saw $100bn wiped off its market value and while its share price has recovered somewhat in recent weeks it is still at a historically low level.

Rival US oil firm ExxonMobil has reportedly met with senior White House officials to discuss the viability of a bid, while there have also been reports that Chinese oil firms were considering a hostile take over.

BP has prepared itself to resist any unsolicited takeover and has reportedly appointed Goldman Sachs and Blackstone to defend against any bids.

The company's position is likely to be aided by the reluctance of both the US and UK governments to approve any deal that could lead to job losses.

In related news, BP completed its $98.3m acquisition of the cellulosic biofuel arm of US firm Verenium Corporation.

Under the terms of the deal, BP's biofuel division will take control of Verenium's US pilot plant and demonstration facility as well as its R&D facilities and related biofuel technology.

Verenium will continue to operate as a specialist developer of commercial enzymes, including enzymes for use in the biofuels industry.