Standard & Poor?s Ratings Services boosted the credit outlook of BP, Europe's second-largest oil company, to stable from negative, citing higher oil prices, noting the British oil giant is better positioned to fund liabilities associated with the Gulf of Mexico oil spill than the ratings agency previously thought.
Following the Gulf spill, the largest oil spill in U.S. history, BP (BP) announced plans to sell $30 billion in assets to raise cash for spill expenses. The company has thus far sold about $25 billion in assets and on Tuesday, Citigroup issued a report saying BP should return some of those proceeds to investors in the form of a share repurchase plan.
''The outlook revision reflects our view of reduced downside risk to BP's credit quality,'' S&P said in a statement. BP's cash flow over the next 12 months will cover its needs by a factor of 1.3, and BP will be able to maintain access to bank lending and capital markets, Bloomberg News reported, citing the ratings agency.
BP has set aside $41 billion to cover spill-related costs and the company has been able to procure settlements from some of its Macondo well partners, easing its financial burden in the process. While BP's asset sales program has thus far been a success, some investors have pushed CEO Bob Dudley to sell more than $30 billion in assets to raise additional cash.