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BP has put its North Sea oil business up for sale, saying it will try to find a buyer amid a political dispute over whether the UK government should allow more drilling.
Prime minister Andy Burnham on Thursday signalled that he would be open to more extraction in the North Sea, although he did not make clear if that would mean new licences or allowing expanded use of existing wells.
BP, one of the biggest companies on the FTSE 100, said it was selling the North Sea business as part of an ongoing portfolio review under American chief executive Meg O’Neill. The American was appointed in December with a remit to refocus the company after a tumultuous period of three chief executives in three years.
The company said it wanted to direct the spending required on the North Sea to other places which could offer higher financial returns.
double quotation markThe UK has been our home for more than 100 years and will continue to play an important role in our future. We’re proud of the jobs we create, the contribution we make to the UK economy, and the work we do to keep energy flowing every day.
The North Sea remains integral to the UK’s energy system. However, as we focus our portfolio and direct capital to our highest-value opportunities, we believe our North Sea business will be better positioned as part of another company. It has world-class people, resilient assets and a proud heritage, and it is precisely these qualities that can attract an owner ready to back its next chapter. We are seeking an outcome that recognises that value.
The question of whether to allow more North Sea drilling has become politically contentious in recent months. Environmental campaigners are aghast that Labour is considering allowing more drilling for planet-heating fossil fuels, but Burnham appears to have decided it would be more useful to drill at a time of high energy prices.
Donald Trump revealed Burnham’s plans after a first phone call between the US president and the new prime minister. Burnham later told reporters:
double quotation markI indicated in the phone call that we had, a week last Monday, that I would take a pragmatic approach when it comes to the North Sea, and that is my intention as we go forward from here.
There is a resource there. When people are struggling, we can’t ignore that. Hence, me indicating that to the president.
South Korea’s stock market has been going through a period of turbulence for the ages thanks to the AI boom – and fears it will bust. It continued on Friday, with the largest single-day increase in the benchmark Kospi index’s history.
Korea’s Kospi is up an astonishing 17.91% today. It fell 11% on Tuesday – just shy of the record 12.06% decline hit in early March in the first days of the Iran war – and 6% on Wednesday.
Global stock markets have been dominated in recent months by artificial intelligence companies. But Korea’s stock market does not have the depth of the US, meaning its AI-exposed chip companies are even more dominant. The share price of chipmaker SK Hynix soared 30% on Friday, while Samsung Electronics was up 28%.
Read moreOver the last 12 months the index is up 104%, but over the last one month it is down 20%. In this wild week it has dropped a mere 1.1% – all that sound and fury, signifying nearly nothing. These are not normal moves.
Sergi Lanau, director of emerging markets strategy at Oxford Economics, said that “We believe sentiment is still frothy in Korea”, citing the size of assets in leveraged exchange-traded funds (ETFs), which use debt to pump up returns. He said:
double quotation markAlthough we believe the AI buildout still has legs, we expect burned leveraged traders in Korea to continue to exit the market, keeping it under pressure. That’s sufficient reason to lower our weight on the broader emerging market complex to neutral.
Korea’s authorities have this week sought to tighten restrictions on leveraged ETFs, although given the wild swings some investors will already be ruing the day they bought them.
10am BST: Eurozone inflation rate (July; previous: 2.8%; consensus: 2.9%)
