) expects to resume deep-sea drilling work off the coast of Libya
in 2013. The exploration program worth $2 billion was halted by the
company in February 2011 following the rebel uprising that led to
the overthrow of Col. Moammar Gadhafi's regime.
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In May, BP recommenced its operations in the North African country
and is now planning to start the preliminary activities required
before drilling work.
The deal - originally signed back in 2007 - included exploration of
the frontier Sirte Basin. Management at the British major believes
that this geographical area is equivalent in size to more than ten
of its deep-water blocks in Angola. As part of the 2007 deal, the
company has already amassed 31,000 square kilometers of
three-dimensional seismic data, both offshore and onshore.
Management's renewed drilling program in Libya will see BP drill 25
exploration wells in 2013, which is expected to increase cash flow
and returns to shareholders.
BP also invited tenders on Libyan National Oil Company website to
conduct underwater geological surveys. The closing date for tender
submission was August 14.
London, England-based BP is one of the world's largest energy
companies, providing its customers with fuel for transportation,
energy for heat and light, retail services and petrochemical
products. It operates in three segments: Exploration and
Production, Refining and Marketing, and Other Businesses and
Recently, BP revealed plans to sell its California oil refinery and
800 statewide gas stations to refining giant
) for $2.5 billion. This brings its total divestitures to about
$26.5 billion since the announcement of the divestiture program in
BP announced divestitures of several non-core GoM assets, including
its stakes in Marlin, Horn Mountain, Holstein, Ram Powell and Diana
Hoover. The company has a fund-raising objective of about $38
billion by the end of next year. Although BP's asset sale will help
in overcoming spill-related costs, its production could be hampered
by this ongoing venture.
BP holds a Zacks #3 Rank (short-term Hold rating). Longer term, we
maintain our Underperform recommendation on the stock.