BP Sells Pakistan Assets to China UEG for $775 Million

BP Plc sold fields in Pakistan to Hong Kong-based investment group United Energy Group Ltd. as part of its plan to pay for the Gulf of Mexico oil spill.

UEG will pay $775 million in cash, including a $100 million deposit, and the deal is expected to close in the first half of 2011, BP said today in a statement in London. The net production of the assets is about 35,000 barrels of oil equivalent a day.

The sale brings BP closer to its goal of disposing of as much as $30 billion of assets worldwide after the worst U.S. oil spill forced the company to set aside $40 billion for cleanup and litigation. The company has divested about $21 billion of fields so far.

“It looks like a good fair price,” said Jason Kenney, an analyst at ING Wholesale Banking in Edinburgh. “BP continues with the program well ahead of expectations. At this rate, I wouldn’t be surprised if BP manages to offload more than its target.”

BP rose 2 percent to 467.7 pence as of 12:04 p.m. in London, the highest since May 28. The shares are down 29 percent since the April 20 accident.

The purchase is UEG’s first venture in Pakistan, BP said. The Chinese company’s biggest shareholder is billionaire Zhang Hongwei, who is also the chairman of Jinzhou Port Co., a port services company, and Orient Group Inc., a maker of building materials.

Proved reserves in the Pakistan sale are 43.1 million barrels of oil equivalent as of the end of 2009, BP said. The company retained stakes in three unexplored offshore fields operated by Pakistan’s state-owned Oil & Gas Development Co.

“Today’s agreement is further evidence of the rapid progress BP has made toward the divestment target we set out last summer,” BP Chief Executive Officer Robert Dudley said in a statement. “We now have agreements to secure the majority of our divestment target.”

To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net.

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

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