By Tom Bergin and Matt Spetalnick
LONDON/WASHINGTON (Reuters) - British energy giant BP <:BP.LO:>Plc on Tuesday announced plans to sell assets worth about $1.7 billion as it seeks to build up cash to pay for the worst oil spill in U.S. history.
British Prime Minister David Cameron, at a White House news conference after a meeting with President Barack Obama, said he understood U.S. anger at BP over the oil spill. But Cameron said it was also important to both the U.S. and British economies that the company stay strong and stable.
Exactly three months after an explosion on an offshore rig killed 11 workers and caused millions of barrels of crude to spill into the Gulf of Mexico, BP announced it would sell its Vietnam pipeline and upstream assets as well as its Pakistan assets.
It is the first major asset sales announcement since BP committed to raise $10 billion in the coming year to pay for damage claims, the cleanup and legal costs related to the leaking well.
BP, which said on Monday it had spent about $3.95 billion so far on the oil spill, agreed under intense pressure from U.S. authorities last month to set up an independently administered $20 billion escrow fund for damage claims from the spill.
The Obama administration has stressed that the amount is not a cap on the company's liabilities. Cameron praised the company for the steps it has been taking to plug the leak and to pay for damages suffered by people in the Gulf, where the vital tourism and fishing industries have been devastated.
The broken well was capped last week -- at least temporarily -- after spilling up to 60,000 barrels a day of crude for three months.
BP shares were down slightly in New York trading and finished flat in London with little reaction to the planned asset sales.
"I don't regard the asset sales as a big deal, they have so many assets that they could only sell a few and get $10 billion without any trouble," said Kurt Wulff, president at McDep LLC in Needham, Massachusetts.
Analysts said investors, who reacted positively after the top U.S. oil spill official said on Monday that seepage about three kilometers (1.9 miles) from the well was not caused by a pressure test, were still wary.
"So much is unknown, the problem with the stock is investors are making bets with very little information," said Mark Coffelt, chief investment officer, Texas Capital Value Funds in Austin, Texas. "It's a difficult stock to hold, because it's so hated right now, which probably means it's a good buy."
'STATIC KILL'
The test on the well, which has been extended in 24-hour increments by the U.S. government, will continue until Tuesday afternoon and then be reevaluated for a possible further extension. Scientists are now weighing another option -- a so-called "static kill" to help smother and plug the leak.
This would involve pumping heavy drilling mud and possibly cement into the well, much like BP's failed "top kill" in May.
The American public and U.S. lawmakers are angry with BP for the oil spill, which has caused an economic and environmental disaster in five states along the Gulf Coast, hurt Obama's approval ratings and complicated traditionally close ties with Britain.
Illustrating that anger, the energy giant is facing questions on an unrelated issue -- whether it had a role in the release last year of Libyan Abdel Basset al-Megrahi. He was sentenced to life for bombing a Pan Am flight in 1988 over Lockerbie, Scotland, in which most of the 270 dead were Americans.
BP has confirmed it lobbied the British government in 2007 over a prisoner transfer deal for fear its commercial interests in Libya were being damaged, but said it was not involved in talks over Megrahi.
Cameron urged Americans to realize that Megrahi's release and any role BP might have had in it, was not connected to the oil spill.
"BP should rightly be blamed for what has happened in the Gulf," he said, noting that it was BP's role to cap the leak, clean up the mess and pay appropriate compensation.
But he added: "I think it's important to separate that from the decision to release al-Megrahi ... which was a decision made by the Scottish parliament."
Several U.S. lawmakers have called on the United Kingdom to review its decision to release Megrahi and will talk to Cameron about the issue.
Cameron rejected calls for a new inquiry, saying he has long been clear about his opposition to Megrahi's release. But he said his government would cooperate with any U.S. congressional hearings into whether BP had role in his release.
(Additional reporting by Doina Chiacu and Tabassum Zakaria in Washington, Matthew Lynley in New York, Writing by Deborah Charles and Sitaraman Shankar; Editing by Eric Beech)
