Create a free account to continue

BP Sells Aluminum Unit Amid Gulf Drilling Rumors

BP said it is selling its Arco Aluminum subsidiary for $680 million, but declined to comment on reports that it is about to restart drilling in Gulf of Mexico.

LONDON (AP) -- BP announced Monday it is selling its Arco Aluminum subsidiary to a Japanese consortium for $680 million, but declined to comment on reports -- denied by U.S. authorities -- that it is about to restart drilling in the Gulf of Mexico.

The British company is selling Arco, a supplier of rolled aluminum sheet used mainly in the production of drink cans, as part of its drive to dispose of $30 billion in noncore assets by the end of this year.

Including the Arco deal, the company has notched up sales worth more than $24 billion.

"Although a strong business, Arco Aluminum is clearly a non-strategic asset for BP," said Chief Executive Bob Dudley. "Today's agreement will deliver an attractive price for the business, unlocking its value for our shareholders."

The Arco business, based in Louisville, Kentucky, is being sold to a consortium led by Sumitomo Light Metal Industries, Furukawa Sky Aluminum Corp. and Sumitomo Corp.

Meanwhile, the U.S. Bureau of Ocean Energy Management, Regulation and Enforcement denied reports that the London-based company had struck a deal allowing it to resume drilling in the Gulf. BP needs a permit from the bureau to restart any work in the Gulf.

The Financial Times reported that the London-based company has been given approval to drill 10 existing wells that were underway before the accident and that it needs to maintain or increase production on existing platforms.

The bureau said on Sunday that "there is no such deal." BP declined to comment.

The issue is a politically sensitive one for BP and President Barack Obama's administration as the fallout of last year's massive oil spill continues to reverberate. Any approval for drilling is expected to focus on existing production wells, rather than new exploration wells.

BP PLC shares were up 0.7 percent at 473.45 pence ($7.64) in early afternoon trade on the London Stock Exchange.

More in Supply Chain