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BP begins its $7bn Brazilian oil adventure

BRITISH Petroleum (BP) has begun its long-awaited venture into the Brazilian offshore market after agreeing to buy $7bn (£4.6bn) worth of assets from Devon Energy.

Devon’s largely unknown but possibly highly lucrative Brazilian assets have been described by Tony Hayward, chief executive, as “exciting” and have fulfilled his ambition of gaining a foothold in the region.

It is BP’s acquisition of Brazil’s Campos basin, which is already home to a number of significant oil fields, that has attracted most attention from the market.

Andy Inglis, chief executive of exploration and production added: “Through our entry into Brazil, BP will add a major position in another attractive deepwater basin.”

As part of the deal Brazil will also acquire Azeri and Gulf of Mexico assets. The deal will help BP meet its goal of growing production at one to two per cent per annum in the next decade.

Analysts said it was hard to estimate whether BP was paying a good price for the assets as they included fields whose reserves are unknown because they are still being explored.

However, they said it was vital to have a presence in Brazil given its progress as an emerging nation.

David Buik of BGC Partners said: “The deal makes sense and gives BP access to new areas of oil exploration. Top players need a relationship with Brazil even though it’s expensive.”