BP sells stake in Pan Am for $7bn to Bridas

City A.M. Reporter
BP YESTERDAY said it had agreed to sell its stake in Argentina-based oil and gas group Pan American Energy (PAE) to Bridas Corp, half-owned by China’s CNOOC, for $7bn (£4.5bn), as it raises cash to pay for the Gulf oil spill.

The planned sale of the 60 per cent interest, which sources previously said was under discussion and which was for a price in line with analysts’ estimates, brings to $2bn the amount that BP has raised, or agreed sales on, in recent months.

BP has said it expects the costs of the Gulf of Mexico oil spill -- the United States’ worst ever -- to hit $40bn and said it would sell assets worth $25-$30bn by the end of next year to pay for it.

Bridas already owns a 40 per cent stake in Pan American Energy, which BP said was Argentina’s second-largest producer of oil and gas.

Bridas was owned entirely by the family of Argentine tycoon Carlos Bulgheroni until CNOOC agreed to buy a 50 per cent stake for $3.1bn in March.

The 60 per cent stake BP is selling represents reserves of 917m barrels of oil equivalent (boe) and production of 143,000 boe per day.

US oil major Exxon Mobil Corp is seeking to sell its Argentine unit Esso, which controls hundreds of service stations and a refinery.

“Today’s agreement demonstrates both the high quality and attractiveness of the assets throughout BP’s global portfolio and also the company’s ability to meet our significant financial commitments arising from the Gulf of Mexico tragedy,” Bob Dudley, BP’s chief executive, said.