UPDATE:BP Oil Spill Loan Inches Up To $9B As More Banks Join-Sources

(Adds detail, background, comment) By Carol Dean Of DOW JONES NEWSWIRES LONDON (Dow Jones)--Oil company BP PLC's (BP) standby loan has inched up to around $9 billion as more banks join the group of lenders supporting the company against possible claims related to the oil spill in the Gulf of Mexico, a person familiar with the situation said Monday. Around eight or nine banks have agreed to lend around $1 billion each to BP on a bilateral basis, this person said. "BP is calling on its relationship banks to provide liquidity and more are likely to join the group," this person said. Among the banks likely to be lenders are Barclays PLC, BNP Paribas SA, Citigroup Inc., Banco Santander SA, HSBC Holdings PLC, Royal Bank of Canada, Royal Bank of Scotland Group PLC and Societe Generale SA, the person said. The standby loans provide the company with immediate access to liquidity to deal with the cost of the oil spill and meet its liabilities while BP considers longer-term funding options, the person said. The loans have a one-year maturity with a one-year extension option. Among options open to BP for raising cash is selling its 60% stake in Argentine oil company Pan American Energy to Cnooc Ltd. (0883.HK) as recently reported by Sky TV, and selling a stake in BP to a sovereign wealth fund. BP's stake in Pan American Energy is worth up to about GBP6 billion, and BP is confident of reaching a deal within weeks, Sky TV's business editor Mark Kleinman said. Selling the majority of its stake in the Argentine company could cover in a matter of weeks the vast bulk of the $10 billion of asset sales BP has targeted over the next 12 months, Kleinman said. Zawya Dow Jones reported Monday that a top official said Libya should buy a strategic stake in BP PLC (BP.LN) to take advantage of its weak share price following the giant oil spill from one of its wells in the Gulf of Mexico. Shokri Ghanem, chairman of Libya's Nation Oil Co., said he will recommend buying a stake in BP to the Libyan Investment Authority, or LIA, the North African state's sovereign wealth fund. "BP is interesting now with the price lower by half and I still have trust in BP, I will recommend it to the LIA," Ghanem said in a telephone interview with Zawya Dow Jones Monday. In mid June, BP struck a deal with the Obama Administration to set aside $20 billion to cover Gulf of Mexico oil spill claims. The company will pay $3 billion into an escrow account in the third quarter of this year and another $2 billion in the fourth quarter. This will be followed by payments of $1.25 billion a quarter until the $20 billion has been fully paid. Liabilities aren't capped at $20 billion. -By Carol Dean, Dow Jones Newswires; 44 20 7842 9306; carol.dean@dowjones.com (Tahani Karrar-Lewsley in Dubai contributed to this article) (END) Dow Jones Newswires July 05, 2010 11:05 ET (15:05 GMT)