BP to sell Gulf of Mexico Oil Fields

By Michael Erman

NEW YORK | Mon Sep 10, 2012 5:54am EDT

 

 

(Reuters) - BP is in talks to sell some of its Gulf of Mexico oil fields to Plains Exploration & Production Co for roughly $7 billion, a person familiar with the matter said on Sunday, as the U.K. oil firm looks to raise money to pay for damages from the 2010 oil spill.
The amount BP will have to pay in damages for the Deepwater Horizon oil spill -- America's worst ever -- is still in dispute. But last month the U.S. Justice Department accused the company of gross negligence and willful misconduct over the spill, a position that could lead to nearly $21 billion in civil damages if a federal judge agrees.
BP said in May that it was looking to sell a number of mature fields in the Gulf of Mexico, including its positions in the Marlin, Horn Mountain, Holstein, Ram Powell, and Diana Hoover fields.
A deal would be transformational for Houston-based independent oil explorer and producer, Plains, which had a market capitalization of $5.2 billion as of Friday. The company already has assets in the Gulf, as well as in California, Texas, Louisiana, and the Gulf of Mexico.
Like many other independent U.S. oil and gas companies, Plains has been working to build up its oil assets, as the price for U.S. natural gas has been in a prolonged slump. It had previously estimated that about 57 to 60 percent of its 2012 production would be oil.
The Wall Street Journal, which earlier reported news of the talks, said a deal could be announced as soon as this week.
The source, who declined to elaborate on the timing of a potential deal, cautioned that the companies were in continuing discussions and talks could still fall apart.
Another person familiar with the matter said that BP has been shopping the Gulf of Mexico offshore oil fields to potential buyers.
The sources asked not to be named because the matter was not public. Representatives for BP and Plains Exploration were not immediately available for comment on Sunday.
BP has been selling off other assets to help pay for the spill. The April 20, 2010 explosion of the Deepwater Horizon drilling rig killed 11 workers and triggered the largest U.S. offshore oil spill from the ruptured Macondo well, in which BP held a 65 percent stake.

(Writing by Soyoung Kim; Editing by Diane Craft and Ed Davies)

Abraham Lincoln’s Emancipation Proclamation dilemma

By Philip Kennicott,
“Now we are engaged in a great civil war,” said Lincoln at Gettysburg, “testing whether that nation, or any nation so conceived, and so dedicated, can long endure.”    

 Lincoln was fond of drawing attention outward, from local events to world import, from the crisis in America to the larger question of whether any democracy could survive the test the divided United States then faced. The Civil War, he argued, “embraces more than the fate of these United States.”
 Before issuing the Emancipation Proclamation — which would free slaves only in the seceded states that remained beyond the president’s immediate control — he fretted about “a document that the whole world will see must necessarily be inoperative, like the Pope’s bull against the comet,” referring to Callixtus III, who supposedly excommunicated Haley’s Comet because it was a bad war omen.

And when he had finally signed the preliminary Emancipation Proclamation in September of 1862, he spoke to celebratory crowds gathered outside the White House: “It is now for the country and the world to pass judgment.”
This was more than a rhetorical trope, and not just a reminder that the world was watching. Lincoln’s agonizing over the proclamation reflected a host of worries about self-government, practical politics, the future of the newly free African Americans and very possibly his own racist misgivings.
But foremost among these was the question of legitimacy and the constitutionality of the document. Even if issued as a war measure, a mere confiscation of enemy property, it was sure to be seen by many — perhaps even by Lincoln himself — as extraordinary medicine, even extra-legal. His Hamlet-like vacillating and deception during that period 150 years ago, when he pondered the document, wrote it, hid it in a drawer and finally issued it can best be understood in terms of Lincoln’s deep-seated fears about the viability of democracy: Was it capable of fixing itself?

In the late 19th century, as white Americans tried to exorcise the memory of slavery, the Emancipation Proclamation lost luster, replaced in the popular imagination by the more eloquent Gettysburg Address (which didn’t even mention slavery). And today it seems strange that we celebrate the proclamation at all, except as a precursor to the far more sweeping and triumphant accomplishment of the 13th Amendment to the Constitution, which two years later banned slavery everywhere in the country, without qualifications or geographical exceptions. We have mostly forgotten the reality of the document itself, its ignominious origins in military crisis, its lack of moral certainty, its dull rhetoric and all the other faults that led historian Richard
Hofstadter to complain that it “had all the moral grandeur of a bill of lading.”

And yet this document of war remains a sacred document of democracy, testament to the messiness rather than the ideals of governing. In an age when Western democracies are confronted by new forms of authoritarianism, which offer prosperity and security in exchange for political quiescence, the Emancipation Proclamation forces us to think about the fundamental vexations of representative government: Is democracy capable of resolving grand crises? Can we defend against terrorism without compromise to liberty? Can we reform our economies and free ourselves from crippling debts? Can we stave off environmental apocalypse? In short, is democracy capable of great things?

 Both celebrated and condemned
If you can make your peace with the Emancipation Proclamation, you can make your peace with Lincoln. The president claimed it as the signal accomplishment of his administration, and it established him in the minds of free slaves and the annals of popular history as “the Great Emancipator.” Parsing the document may be the most productive and inconclusive franchise in Lincoln scholarship. Over the past 150 years, it has been celebrated as the death knell of slavery yet condemned as an unconstitutional usurpation of power, a capitulation by the president to his radical left flank, proof of Lincoln’s slow and inadequate evolution toward racial justice, a mere tool in the prosecution of the war, a political gambit to demoralize the South, a reckless invitation to race war, and both the least and the most that a cautious, deliberate leader could manage at the moment.

During his presidential campaign, Lincoln promised that his personal opposition to slavery wouldn’t affect the institution where it was legal. And while the Civil War was first prosecuted with assurances that the goal was the restoration of union, not abolition, Lincoln began dropping hints of of a general emancipation in the summer of 1862.
His record on slavery up to that time had been mixed. He had countermanded or discouraged orders by Union generals freeing slaves in Missouri, South Carolina, Georgia and Florida, citing presidential prerogatives and the necessity of placating the slave-holding but still-loyal border states. But he had also signed an April 1862 bill that abolished slavery in the District of Columbia, and a few months later he freed slaves throughout U.S. territories.
His rhetoric was equally ambivalent. Lincoln’s opposition to slavery often seemed lukewarm. As Frederick Douglass said years after the war, “Viewed from the genuine abolition ground, Mr. Lincoln seemed tardy, cold, dull and indifferent.”
Historians have attempted to square these apparent contradictions in different ways. John Hope Franklin, in his 1963 history of the Emancipation Proclamation, gave Lincoln the credit of most doubts, depicting the president besieged on all sides, from radical abolitionists who denounced an urgent moral evil to slaveholders still loyal to the Union who constantly threatened to join the South if Lincoln wavered on his promise to pursue only reunification. “The pressure of individuals and groups added to the President’s woes without contributing to a practical solution of the problem,” wrote Franklin.
No matter his feelings on slavery, Lincoln felt compelled to present and defend the Emancipation Proclamation as a military necessity — a strategic blow to the South, where the economy and thus the war effort depended on slave labor — rather than a moral statement. When it came, it was essentially two documents, beginning with a threat issued on Sept. 22, 1862, that he would emancipate slaves in any state still in rebellion on Jan. 1, 1863. He shared the preliminary proclamation with his Cabinet on July 22 but withheld it on the advice of Secretary of State William H. Seward, who feared it would look desperate to issue it in the midst of the summer’s military disasters. Lincoln waited two months, until after the battle of Antietam — by no means a decisive Union victory, but at least not a disaster — to make it public. The actual proclamation, greeted by ecstatic Jubilee celebrations on New Year’s Day by African Americans and abolitionists in the North, made good on the earlier threat.

 Version one
The first proclamation wasn’t universally popular in the United States or abroad. It angered abolitionists for its half measures, for being merely an instrument of military policy, for its vague promise of compensation to slave owners and for its mention of colonization — Lincoln’s scheme to send freed blacks to other countries after liberation. The working class in England loved it, but their leaders, deeply embroiled in Colonial projects, saw it as a dangerous invitation to black-on-white war and fundamentally hypocritical. “The principle asserted,” said the Spectator, “is not that a human being cannot justly own another, but that he cannot own him unless he is loyal to the United States.” Between the preliminary threat and the actual emancipation, however, feelings softened, especially among abolitionists.

Yet nothing that troubled Lincoln in the first document was cleared up by the second. Lincoln repeatedly said he believed that the proclamation was constitutional, but it was immediately declared not so by editorialists throughout the North and the South. Even former Supreme Court Justice Benjamin R. Curtis, who had dissented in the notorious 1857 Dred Scott case and resigned from the court in part because of the decision, attacked Lincoln’s proclamation as an unjust extension of executive power. When Lincoln had a chance to appoint a new chief justice in 1864, he chose the stalwart anti-slavery Republican Salmon Chase, in part because Chase could be counted upon not to overturn the proclamation.
Regardless of Lincoln’s motivations and true feelings, his delay and mixed messages had a serious impact on African Americans, according to some scholars.
“There is no making sense of such a perverse record,” writes historian Mark Neely Jr., who has convincingly demonstrated the miserable effect Lincoln’s equivocating had on free blacks. The nation was riven by race riots, and some African Americans in the North were seriously considering leaving the country: “A truthful revelation of the government policy embodied in a document in Lincoln’s desk might have changed the course of their lives.”
But likely, Lincoln was no less consistent than any other man, and though a gifted logician in argument, he was not necessarily logical in his own views on race and slavery. If he could be transplanted from his age into ours, his racial views would sound like the soft-core animus of a genteel “Bell Curve” racist: Intent on basic fairness, but convinced that whites are more civilized and better adapted to self-governance than blacks. His view on abolition might remind us of the sincerely halfhearted way that many people today embrace environmentalism or vegetarianism, convinced of their moral necessity yet unwilling to zealously oppose an entrenched way of life. This is either hypocrisy or moderation, depending on one’s perspective.
 
In fear of great power
Throughout his career, Lincoln was haunted by an almost superstitious fear of executive fiat, which may best explain his anguish before signing the proclamation. It showed up early, in an 1838 speech to the Young Men’s Lyceum in Springfield, Ill., in which he imagined a Nietzschean superman rising up within American democracy and threatening it with dictatorial ambition: “Is it unreasonable, then, to expect that some man possessed of the loftiest genius, coupled with ambition sufficient to push it to its utmost stretch, will at some time spring up among us? And when such an one does, it will require the people to be united with each other, attached to the government and laws, and generally intelligent, to successfully frustrate his designs.” This “towering genius,” Lincoln feared, might exploit the demagogic potential of slavery: “It thirsts and burns for distinction; and if possible, it will have it, whether at the expense of emancipating slaves or enslaving freemen.”

 This was Lincoln in fear of a man just like himself. The idea of great power often seemed to flummox him. “If all earthly power were given me, I should not know what to do, as to the existing institution,” he said, as preamble to some of his more overtly racist and despairing remarks about slavery. His comparison of emancipation to a papal “bull,” and his frequent reference to it as a “thunderbolt” suggest how keenly he felt it might set a dangerous precedent for a nation of laws, even if limited in scope and justified as an act of war. Perversely, he yielded often enough to the temptation he abhorred, suspending habeas corpus and arresting a political opponent for giving a speech that might discourage the war effort.
And yet there is almost universal agreement — and Lincoln felt so, too — that while the 13th Amendment abolished slavery legally, the Emancipation Proclamation had killed it symbolically, and, short of a Southern victory, in all practical senses. So while a magnificent act of human justice, it was hardly an accomplishment of democracy. By the summer of 1862, Lincoln had despaired of a purely democratic process to abolish slavery, through compensation, containment and a natural withering away. Slavery would require an extraordinary response, a “thunderbolt” from outside the system of laws and representative government. He himself would have to hurl that bolt.

A crisis he envisioned
The unruliness of democracy, bitter sectional feeling, entrenchment of the slave system and Southern moral defensiveness had led America to the place of crisis Lincoln so feared in his Lyceum speech. Secession and war were failures of the democratic system, and the emancipation order underscored that failure.
This was not the way things were supposed to work in the City on a Hill, which looked impotent and broken in a world still full of vigorous autocrats. In 1861, a year before the American emancipation, Alexander II of Russia freed more serfs, and promised them more opportunities, than Lincoln did the slaves. In 1879, as Reconstruction was failing, the czar compared his thoroughly authoritarian solution with Lincoln’s Emancipation Proclamation, saying he could not “understand how you Americans could have been so blind as to leave the Negro Slave without tools to work out his salvation.”
Lincoln was long dead. But he might have said it wasn’t a matter of being blind to the problem or unaware of the dangers. He had done what he could, which might be more than the Constitution allowed. And in so doing he had righted a great wrong, paved the way for the union to survive and set a precedent that deeply troubled him.
We can sympathize today, living in a democratic system that is even larger and more unwieldy, and growing more polarized. It is a common theme of political speculation that large, Western democracies may be endangered, today: by the lethargy with which they respond to crises, the half measures and sausage making that vitiates most efforts at reform, and the sheer accumulation of threats — environmental, political and social. The Emancipation Proclamation is a terrifying reminder that sometimes the only way to fix the system is to let it break down and then hit the reset button.

Top Southeast Asia Property Deal Looming at F&N: Real M&A

By Angus Whitley, Jonathan Burgos and Joyce Koh - Sep 10, 2012 6:31 AM GMT+0300

Fraser & Neave Ltd. (FNN), the 129-year- old conglomerate selling its brewery business, is poised to fracture further as the chance to own a piece of Singapore’s most famous shopping strip lures buyers.

 

Shoppers and pedestrians cross a road on Orchard Road in Singapore. Photographer: Munshi Ahmed/Bloomberg

After Heineken NV (HEIA) acquires F&N’s stake in a brewery they own for S$5.4 billion ($4.3 billion), the Singaporean company will still own businesses ranging from soft drinks to apartment buildings. An acquirer may pay as much as S$7.7 billion for the Frasers Centrepoint Ltd. property unit, 71 percent more than is reflected in F&N’s share price, said Religare Capital Markets Ltd. That would be Southeast Asia’s largest real-estate deal, according to data compiled by Bloomberg.
Rent in Singapore has remained high as the population surged 18 percent in five years and the city attracts a million visitors a month, data compiled by Bloomberg show. F&N’s 332,261-square foot mall on Orchard Road, the city’s biggest tourist attraction, and over 7,000 furnished apartments from Europe to Australia may lure foreign buyers, including billionaire Li Ka-Shing’s Cheung Kong Holdings Ltd. (1), said DMG & Partners Securities Pte. With similar assets and S$5.1 billion of cash, Singapore’s CapitaLand Ltd. (CAPL) is a natural buyer, according to Henderson Global Investors Ltd.
“These are big assets that don’t often come onto the market,” Tim Gibson, Singapore-based head of Asia-Pacific property research at Henderson, which oversees more than $100 billion, said in a telephone interview. “There’ll be lots of interested parties. Getting your hands on these types of assets will be tough otherwise.”

Brewery Sale

F&N rose as much as 2.2 percent today, and was up 1.4 percent at S$8.50 apiece at 11:20 a.m. in Singapore. The benchmark Straits Times Index was little changed.
“F&N remains fully committed to deliver superior value to shareholders,” the company said in an e-mailed response to questions about its plans for the property assets. “Moving forward, we will sharpen our focus on and enhance value of the two core businesses of F&B and Properties through continued investments in these businesses and strategic M&As.”
Last week the company said that some of the S$4.8 billion net gain from the brewery sale will be used to repay debt, “giving us flexibility to take advantage of business opportunities in the food & beverage and properties businesses, in the region.”
Started in 1883 as a carbonated soft drinks company by John Fraser and David Chalmers Neave, F&N entered the property business more than a century later, according to its website. The company is better known for its stake in 81-year-old Asia Pacific Breweries Ltd., the brewer and distributor of Tiger and Heineken beers in markets from Indonesia to China.

APB Sale

Heineken’s agreement last month to buy APB, taking control of its main distribution vehicle in Asia, will leave F&N dominated by real estate. Excluding brewery income, property accounted for three quarters of F&N’s earnings of S$703 million last year, data compiled by Bloomberg show. The rest came mostly from soft drinks, dairies, and printing and publishing.
F&N shareholders are due to vote on the APB sale Sept. 28. With nearly 44 percent of F&N’s shares owned by two brewers, Thai Beverage Pcl (THBEV) and Japan’s Kirin Holdings Co., the sale may hasten the dismantling of F&N into consumer and real-estate businesses, according to Jenai Chua, a Singapore-based analyst at Bank Julius Baer & Co., which manages $281 billion in assets.
“The new owners probably want to maximize their investment value,” Chua said. “Splitting up the assets will be the best way to do it because F&N is trading at a discount to its assets.”

ThaiBev’s Intentions

Kirin is only interested in F&N’s soft-drinks business because of the unit’s reach into Southeast Asia, the company said Aug. 3. ThaiBev plans to expand in Asia using F&N’s networks in the region, Chief Executive Officer Thapana Sirivadhanabhakdi told reporters in Bangkok yesterday.
Spokesmen for both companies declined to comment last week.
With F&N’s total market value at only S$11.9 billion as of last week, the property unit is being undervalued by investors, said Tata Goeyardi, a Singapore-based analyst at Religare.
While Goeyardi estimates the property portfolio is worth S$8.1 billion, F&N’s share price implies a value of only about S$4.5 billion, he said, citing his sum-of-the-parts analysis.
A corporate buyer may be willing to pay as much as S$7.7 billion for F&N’s property division, Goeyardi said. At that size, a sale would be the largest real-estate transaction on record in Southeast Asia, data compiled by Bloomberg show.
“What the share price is implying right now is that the property business is still undervalued,” Goeyardi said in a phone interview. “There are several interested parties that we think would be complementary.”

Orchard Road

Stock investors aren’t subscribing enough value to the property business because the total F&N share price reflects other factors, including the market environment and the impact of other F&N assets, he said. Strategic buyers would only be focused on the value of the properties, he said.
The most valuable of F&N’s fully-owned investment properties is The Centrepoint, a mall in the Orchard Road shopping district, a 2.2-kilometer stretch of outlets and hotels boasting brands including Michael Kors and Abercrombie & Fitch. In its annual report, the company says the mall is worth S$585 million. Behind the property is StarHub Centre, a 10-story office block that the company bought for S$380 million in July 2010 for redevelopment into a high-end residential and retail complex.
According to the Singapore Tourism Board, Orchard Road is the most visited tourism attraction in the city.

Tourist Attraction

F&N’s mall offers a buyer the potential for redevelopment, said Goh Han Peng, a Singapore-based analyst at DMG. Built in 1983, The Centrepoint is now surrounded by modern shopping complexes, including Sydney-based Lend Lease Group’s 313@Somerset and the Ion Orchard, jointly owned by CapitaLand and Hong Kong’s Sun Hung Kai Properties Ltd.
“A location like Centrepoint will always be in demand,” he said. “This development is iconic and would appeal to a foreign developer.”
The property unit also includes Frasers Hospitality, which owns 12 serviced residences and manages 35 others in Australia, China, Indonesia, the U.K., Philippines, Scotland and Singapore, the annual report shows. Serviced properties, popular with executives staying for weeks or months, are furnished like a home and have the housekeeping staff and security of hotels. The apartments are worth about S$1.2 billion, CIMB Group Holdings Bhd. said in an Aug. 21 research note.

Executive Residences

“There’s always demand for serviced residences in growth markets where there’s a lot of business flow, particularly in this part of the world,” said Goh, who thinks the entire property business may be worth up to S$7 billion to a buyer.
F&N also has stakes in five suburban malls, two office buildings and four properties in China and Vietnam. It has seven residential projects in Singapore due to be completed in the next two years and land that could support 3,000 housing units, according to the annual report.
F&N may choose instead to spin off certain real-estate assets in a public offering, rather than a sale, as it did with Singapore-listed Frasers Centrepoint Trust and Frasers Commercial Trust, said Julius Baer’s Chua.
Still, the Singapore properties may prove appealing to foreign acquirers as a rising population and tourism drive up rents, said Bryan Go, an analyst at Phillip Securities Pte.
Apartment rents have surged 50 percent with an influx of expatriate workers raising the city’s population to a record 5.2 million last year from 4.4 million in 2006, according to data compiled by Bloomberg. Singapore has the highest prime retail rents in Southeast Asia, with costs above those in Geneva and San Francisco, data from CB Richard Ellis Group show.

Rising Rent

“Foreigners coming to Singapore for work and business, along with infrastructure developments across the island, should support residential property prices,” Go, who is based in Singapore, said in a phone interview. “If tourism continues to perform well, retail rents should continue to hold up.”
The most likely suitor for Frasers Centrepoint is Southeast Asia’s biggest property developer, Singapore-based CapitaLand, according to Gibson at Henderson.
“If you look at F&N property assets, it has the look and feel of a CapitaLand,” he said. “Few people should know the diversified real-estate space in Singapore better than CapitaLand. They could do something with all of F&N’s assets, which very few players can do.”
Like F&N, CapitaLand has retail centers across Singapore. It also owns Ascott Ltd., operator of about 22,000 serviced residences in Asia, Europe and the Gulf region, according to its website. It may find uses for F&N’s assets, such as including them in existing real estate investment trusts, Gibson said.

‘Exploring Opportunities’’

“With a strong balance sheet including a strong cash position of S$5.1 billion, CapitaLand is always open to exploring opportunities in markets where we have presence,” the company said in a emailed statement on Sept. 6, when asked if it was interested in buying F&N assets.
Other potential bidders include TCC Group Co., controlled by Thai billionaire Charoen Sirivadhanabhakdi, chairman of ThaiBev, according to Religare’s Goeyardi. Another is Cheung Kong, said Goh of DMG.
Cheung Kong is owned by Asia’s richest man, Li Ka-Shing. The company’s Singapore joint venture, which includes Hongkong Land Holdings Ltd. and Keppel Land Ltd., has said it may buy land in downtown Singapore.
Winnie Cheong, a Hong Kong-based spokeswoman for Cheung Kong, declined to comment on its interest in Frasers Centrepoint. Wallapa Traisorat, chief executive officer of TCC Land Pcl, a property arm of TCC Group, couldn’t be reached at her office for comment.
“There are clearly lots of angles here, and lot of things you can do with this,” said Henderson’s Gibson. “If people have a view that the assets are mismanaged or under-managed, then there’s upside to come from the purchase of the assets.”

To contact the reporters on this story: Angus Whitley in Sydney at awhitley1@bloomberg.net; Jonathan Burgos in Singapore at jburgos4@bloomberg.net; Joyce Koh in Singapore at jkoh38@bloomberg.net

To contact the editors responsible for this story: Sarah Rabil at srabil@bloomberg.net; Nick Gentle at ngentle2@bloomberg.net; Philip Lagerkranser at lagerkranser@bloomberg.net