BP Sells Interest in PAE to Bridas for $7.06 Billion

BP Plc, seeking to cover clean-up costs in the Gulf of Mexico, agreed to sell its 60 percent interest in Pan American Energy to Argentina-based oil and gas company Bridas Corp.

Bridas will pay $7.06 billion in cash for the holding, making it the sole owner of PAE, BP said in a statement today. The transaction is expected to be completed in 2011.

BP is aiming to conserve capital and avoid risk after the spill at its Macondo well in the Gulf of Mexico left it facing a bill projected to reach $40 billion and forced former Chief Executive Officer Tony Hayward to resign. The oil company said in July it was planning to sell $30 billion in assets by the end of 2011. Divestments to date, including the PAE sale, total around $21 billion.

“We now have agreements in place that should secure the majority of our divestment target,” BP CEO Robert Dudley said in a statement today. “We will continue to identify further assets that may be strategically more valuable to others than to BP as we complete the program.”

Colombia, Tanzania

In July, BP agreed to sell assets in North America and Egypt to Apache Corp. for $7 billion, while in August the company disposed of fields in Colombia to Ecopetrol SA and Talisman Energy Inc. for $1.9 billion. BP has also sold operations in Vietnam and Venezuela to its Russian joint venture partner TNK-BP for $1.8 billion.

Photographer: Jason Alden/Bloomberg

Robert Dudley, chief executive officer of BP Plc. Close

Robert Dudley, chief executive officer of BP Plc.

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Photographer: Jason Alden/Bloomberg

Robert Dudley, chief executive officer of BP Plc.

The company agreed earlier this month to sell its fuels marketing businesses in Namibia, Botswana and Zambia to Puma Energy, as well as 50 percent interests in BP Malawi and BP Tanzania to a Trafigura Beheer BV unit for $296 million in cash. Last month, BP sold stakes in four Gulf of Mexico deepwater oil and gas fields for $650 million, following the sale of its role as operator of the Tubular Bells fields.

Bridas will pay BP a cash deposit of $3.53 billion and the remainder upon completion of the sale, BP said. PAE controls holdings in four hydrocarbon basins in Argentina, where it is the second largest producer of oil and gas.

Bridas is 50 percent owned by China’s Cnooc Ltd., which spent $3.1 billion to acquire the stake in March. The deal marked Cnooc’s entry in Latin America and topped the $2.7 billion it paid in 2006 for a share in a Nigerian oilfield.

Cnooc and Bridas Energy Holdings will contribute $4.94 billion to Bridas to finance 70 percent of the acquisition, the company said in a statement today. The remaining 30 percent will be paid with third party loans, Cnooc said.

To contact the reporter on this story: Kari Lundgren in London at Klundgren2@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net

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