BP Moves Closer to Asset Sale Goals

The sale of its 60% interest in Argentine joint venture Pan American Energy would bring total planned asset sales to $21 billion

Catharina Milostan 30 November, 2010 | 9:12AM
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BP (BP.) took a major step toward reaching its goal of $25 billion-$30 billion in asset sales by year-end 2011 with the announced sale of its 60% interest in Argentine joint venture Pan American Energy for $7.06 billion to joint venture partner Bridas. This sale would bring total planned asset sales to $21 billion since the firm announced its asset sale program to help cover Gulf of Mexico oil spill costs. We view it favourably, as BP is selling another a noncore asset with limited production impact.

The deal includes a $3.53 billion cash deposit with $1.41 billion due Dec. 3 and $2.12 billion due Dec. 28; the balance is due at closing in 2011. BP will be selling its interest in Pan American Energy's upstream operations in the Southern Cone region of South America with interests in blocks in four hydrocarbon basins in Argentina--Golfo San Jorge, Austral, Neuquen, and Northwest--along with transportation, storage, gas distribution, and power generation facilities. Net production for BP's 60% interest in the joint venture was 143,000 barrels of oil equivalent per day, which represents only 3.6% of BP's total production including joint ventures.

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Securities Mentioned in Article

Security NamePriceChange (%)Morningstar
Rating
BP PLC392.70 GBX1.06Rating

About Author

Catharina Milostan  Catharina Milostan is a stock analyst with Morningstar.

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