WRAPUP 2-BP in talks to sell assets as spill costs mount

* BP says spill costs around $3.5 billion

* Installing new system to capture more oil

* BP shares hit highest level in nearly a month

* Obama’s spill commission starts first public hearing
(Adds more on potential asset sale, Obama commission)

By Ayesha Rascoe and Megan Davies

NEW ORLEANS/NEW YORK, July 12 (BestGrowthStock) – BP Plc
(BP.N: )(BP.L: ) is in talks with U.S. oil and gas company Apache
Corp and others to sell assets worth up to $10 billion as it
grapples with the costs of its spill in the Gulf of Mexico.

BP shares surged more than 9 percent in London and nearly 8
percent in New York on Monday, driven by the potential asset
sales and hopes for a new system to capture almost all of the
spewing oil that has fouled coastlines and hurt tourism and
fisheries in five states.

“The political rhetoric is not as negative as it once was
and that allows people to focus on all the value that lies
within BP,” said Kurt Wulff, president at McDep LLC, an energy
investment research company in Needham, Massachusetts.

The British energy giant is in talks with Apache (APA.N: )
and others about potential asset sales, including stakes in its
Alaskan oil fields, said a source familiar with the situation.

The talks are at an exploratory stage and it was not
certain whether any plans would be advanced enough to be
disclosed before BP announces second quarter earnings later
this month, the source said. [ID:nN11156383]

BP and Apache declined to comment on the reports.

The asset sale talks come as scrutiny of BP ramps up with
President Barack Obama’s independent commission holding its
first public hearings in New Orleans on Monday and Tuesday.

The panel of seven engineers, environmentalists and former
politicians will investigate decisions by oil companies and
government regulators that may have led to the worst oil spill
in U.S. history. [ID:nN12183528]][ID:nN12173926]

Bob Graham, the panel’s co-chair, said on Monday it was
possible the commission could make recommendations in less than
six months on the deepwater drilling moratorium that the Obama
administration has sought to enforce after the disaster.

Interior Secretary Ken Salazar is expected to issue a more
flexible moratorium in coming days after a U.S. appeals court
last week refused to halt deepwater drilling.
<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ For full spill coverage http://link.reuters.com/hed87k Breakingviews [ID:nN12184998] Special Report: Should BP nuke well? [ID:nLDE6610K6] Insider TV http://link.reuters.com/qyk76m Graphics http://link.reuters.com/fuc76m ^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>


BP, whose shares have fallen about 40 percent since an
explosion on its Deepwater Horizon rig on April 20 unleashed
the oil into the Gulf of Mexico, is under enormous pressure to
halt the leak.

It expects to attach a new containment system later on
Monday that could capture up to 80,000 barrels of oil per day
(3.4 million gallons/12.7 million liters), more than triple
current levels of about 25,000 barrels. [nN12179653]

“We have the cap very close and later today we’ll be
attaching it,” Doug Suttles, BP’s chief operating officer, told
a media briefing. “It could take well through the day to

BP, which said the cost of the spill was now about $3.5
billion, expects its first relief well to reach the blown-out
well late this month — a first step in finally plugging the
gusher by the first half of August as planned. [ID:nLDE66B09X]

Obama is also under pressure to show his administration can
resolve the spill and hold BP accountable. The disaster now
sits atop his domestic agenda and has complicated the close
ties between the United States and Britain.

Part of the recovery in BP shares, which had lost $100
billion in market capitalization at one stage, is due to
speculation the company is approaching sovereign wealth funds
for cash to ward off a takeover and to help pay for the spill.

BP Chief Executive Tony Hayward met an Abu Dhabi state
investment fund last week. [ID:nLDE6660B7]
(Additional reporting by Raji Menon in London, Alexandria Sage
in Louisiana, Kristen Hays in Houston, and Matthew Lynley in
New York; Writing by Sitaraman Shankar and Timothy Gardner,
Editing by John O’Callaghan)

WRAPUP 2-BP in talks to sell assets as spill costs mount