BP signs North America and Egypt asset deals with Apache

BP has entered into several agreements to sell upstream assets in the US, Canada and Egypt to Apache Corporation. The deals, together worth a total of US$ 7 billion, comprise BP's Permian Basin assets in Texas and Southeast New Mexico, US; its Western Canadian upstream gas assets; and the Western Desert business concessions and East Badr El-din exploration concession in Egypt.

The decision to make these divestments follows the announcement made by BP last month that it was increasing its target for divestments to US$ 10 billion. The proceeds of the sales will be used by BP to increase the cash available to the group.

BP Chairman, Carl-Henric Svanberg, said: ‘Over the last two months the Board has considered BP's options for generating the cash necessary to meet the obligations likely to arise from the Gulf of Mexico oil spill. BP has an extremely strong asset base which is diversified geographically as well as by asset class. The Board believes that there are opportunities to divest assets which are strategically more valuable to other parties than they are to BP. Today's announcement is the first such transaction and meets the value and strategic criteria of both parties.’

BP group chief executive Tony Hayward said: ‘We have achieved an excellent price for a set of properties that are worth more to others than to BP. This is a good first step which underlines our ability and determination to get maximum value for everything we sell.’

Although each of the transactions is subject to certain regulatory approvals, it is expected that they will all be completed during Q3 2010. Apache is due to pay BP a cash deposit of US$ 5 billion in aggregate on 30 July 2010. The deposit is split US$ 3.25 billion for Canada, US$ 1.5 billion for Permian and US$ 0.25 billion for Egypt.

Read the article online at: https://www.oilfieldtechnology.com/drilling-and-production/21072010/bp_signs_north_america_and_egypt_asset_deals_with_apache-/