Haywards asset grab could yet make him a hero to BPs investors

By Damian Reece, Head of Business 645AM GMT twelve March 2010

BP

So can he, and some-more importantly shareholders, be certain that the 7 billion of those dollars he"s spending on resources in Brazil, Azerbaijan and in America"s deep-water territories in the Gulf of Mexico, will be put to great use?

Unlike physical condition opposition Exxon"s new $41bn merger of XTO energy, Hayward has resisted striking out shopping companies. Instead he"s shopping assets, in this box from Devon Energy, and looks to have struck a decent deal.

BP says each dollar counts as enlarge decrease WEF 2009 BP sees serve pile-up in oil demand, OPEC at the back of the bend Lack of container creates Svanberg a lovely preference as BP authority BP nears finish to prolonged poke for authority Talk of CRH seductiveness and rights issues for Wolseley

Strategically it stacks up by adding to BP"s heading on all sides in deep-water Gulf of Mexico whilst on condition that the initial BP provide for bobbing around off the cost of Brazil, not to discuss serve prolongation in Azerbaijan. The understanding comes with poignant scrutiny interests in these areas and that"s where BP can supplement worth and have the $7bn pay. In Feb Devon estimated net resources of 7bn-11bn barrels in the Mexico and Brazil areas. Just receiving the bottom finish of that range implies BP is essential $1 per intensity barrel.

The understanding additionally underpins Hayward"s new guarantee to urge prolongation at the company. He"s committed to a 1pc-2pc annual enlarge to 2015, off a 2008 base. But this understanding helps magnify that some-more certain opinion for an additional five years after that. And at the cost voiced yesterday that should infer to be essential expansion too.

If Hayward can consistently broach flourishing prolongation and flourishing enlarge afterwards he"ll finish up a favourite in the eyes of investors. With the shares trade on a produce of 6.7pc off a ancestral price-earnings comparative measure of twelve times, afterwards readers competence wish to follow Questor"s new recommendation to buy.

damian.reece@telegraph.co.uk