BP set to sell Pakistan unit for $775m

BP agreed to sell virtually all of its oil and gas assets in Pakistan to Hong Kong-listed United Energy Group for $775m (£491m) as it raises cash to pay for the Gulf of Mexico oil spill.

BP said the Pakistan sale has brought to $21.8bn the amount that the firm has raised in recent months. The British oil major said it expects the clean up costs, compensation and fines from the worst oil spill in American history to hit $40bn.

The oil firm said it will sell assets worth $25-$30bn by the end of 2011 to help pay for it. BP group chief executive Bob Dudley said: “We are continuing to identify further assets that may be strategically more valuable to others than to BP as we complete the programme.”

Most recently it raised $7bn through the sale of its stake in Argentina-based Pan American Energy to China’s CNOOC.

BP closed up 3.2 per cent at 473p, with traders citing talk of potential bid interest from Royal Dutch Shell.

Meanwhile, an Alaska judge yesterday dismissed the state’s claim that BP owes several hundreds of millions of dollars in tax revenues the state claims it lost when the Prudhoe Bay oil field was partially shut down in 2006 because of a BP oil spill. The lawsuit sought $1bn in civil damages.