BP sells $7bn stake in Pan American unit

City A.M. Reporter
SHARES in oil major BP closed lower yesterday after the company said at the weekend it had agreed to sell its 60 per cent interest in Pan American Energy for $7bn (£4.5bn).

Analysts welcomed the sale, saying it was another milestone in the company’s rehabilitation, as it claws its way back from its Gulf of Mexico oil spill, selling assets to cover the expected $40bn cost.

“The $7.06bn price tag for the asset base sold is more than fair in our view,” said ING oil analyst Jason Kenney.

The deal takes BP close to its target of raising $25bn to $30bn in asset sales by the end of 2011, with $21bn in sales agreed in recent months. BP has already sold assets in Venezuela, Egypt and Vietnam. BP has also said it is looking for a buyer for its gas fields in Pakistan, and sales which BP sources said were under consideration include some of BP’s Alaskan fields and interests in Algeria. BP said on Sunday that it had agreed to sell the Pan American stake to Bridas, which is half owned by China’s CNOOC and the family of Argentine tycoon Carlos Bulgheroni. The stake BP is selling represents reserves of 917m barrels of oil equivalent (boe) and production of 143,000 boe per day. BP has said it expects its production to fall to 3.5m boe per day, from four million boe per day last year, as a result of its divestment programme. The shares closed down 1.8 per cent at 436p yesterday.