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BP selling business interests in Colombia

Oilfield Technology,

BP has agreed to sell its oil and gas exploration, production and transportation business in Colombia to a consortium of Ecopetrol, Colombia's national oil company (51%), and Talisman of Canada (49%).

The two companies will pay BP a total of US$ 1.9 billion in cash for 100% of the shares in BP Exploration Company (Colombia) Limited (BPXC).

The sale of the Colombian business is part of BP's plan, announced on 27 July, to divest up to US$ 30 billion of assets over the next 18 months to cover its costs from the Gulf of Mexicio spill, which has been named as the largest oil spill in history. On 20 July BP announced that it had agreed to sell assets in the USA, Canada, and Egypt to Apache Corporation for a total of US$ 7 billion, and the company has also recently informed governments in Pakistan and Vietnam that it intends to divest its upstream interests in those countries. The company is planning on streamlining and focusing on exploration in the wake of the disastrous oil spill.

Tony Hayward, BP group chief executive, said, “I am delighted with the price we have achieved for these assets. BP has been involved in Colombia for more than 20 years and played a major role in finding and developing the country's major oilfields. These have contributed significantly to BP's global production over the years. But it now makes sense for the assets to go to owners more willing than BP to invest in their future development.”

Under the terms of the agreement, Ecopetrol and Talisman are due to pay BP a cash deposit of US$ 1.25 billion with the balance of payment due on completion of the sale.

BPXC has assets including interests in five producing fields in four association contracts, four separate pipeline interests and two offshore exploration blocks. Net proved reserves total some 60 million barrels of oil equivalent and BPXC's net production is approximately 25,000 barrels of oil equivalent a day.

Upstream, BPXC has interests in, and operates, the Tauramena (BP interest 31%), Rio Chitamena (31%), Recetor (50%) and Piedemonte (50%) association contracts, which are due to expire between 2016 and 2020. Producing fields on the licences include the Cusiana oil and gas field, and the Pauto and Florena fields. BPXC also has a 40.56% interest and operatorship of the RC4 and RC5 exploration blocks offshore Cartagena, awarded in 2007.

In the midstream, BPXC has interests in the Cusiana gas processing facility and interests in four pipelines totalling some 1600 km of crude and 400 km of gas pipelines, including a 24.8% interest in the OCENSA crude oil pipeline.

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