By STANLEY REED
7:09 a.m. | Updated
LONDON - BP agreed on Monday to sell stakes in a group of Gulf of Mexico oil fields to the Plains Exploration and Production Company of Houston for about $5.6 billion.
The announcement comes as Robert W. Dudley, chief executive of BP, is raising money to pay cleanup costs and potential fines resulting from a huge oil spill in the Gulf of Mexico in 2010.
He is also trying to use the divestitures to slim down the company and focus more on what he thinks it does best: high-risk, high-return frontier exploration and production, including deepwater fields. The British company has said it is in talks to sell its 50 percent stake in its Russian affiliate, TNK-BP.
A sale of older, smaller assets in the Gulf of Mexico would be in keeping with this effort to sell mature fields.
"While these assets no longer fit our business strategy, the Gulf of Mexico remains a key part of BP's global exploration and production portfolio," Mr. Dudley said in a statement.
In May, BP said it was marketing its interests in a group of gulf fields, including Horn Mountain, Holstein, Diana Hoover, Ram Powell and Marlin. These fields have production of about 62,500 barrels a day, according to estimates by Stuart Joyner, an analyst at Investec in London. The figure is a little more than a quarter of BP's gulf production of 240,000 barrels a day in the three months ended June 30.
The sale of the fields does not mean BP is pulling out of the Gulf of Mexico, as the company expects output there to return to growth by 2014.
Mr. Dudley wants to focus on a group of other fields, including Thunder Horse, Atlantis, Mad Dog and Na Kika. BP is now appraising two new fields named Kaskida and Tiber that it thinks could also become major producers.
Oil from the Gulf of Mexico is among the most profitable in BP's portfolio because of relatively low taxes and exploration and development costs, BP executives and analysts say.
BP had production of more than 400,000 barrels a day in the Gulf of Mexico before the April 2010 explosion at its Macondo well, which killed 11 people on the Deepwater Horizon rig and halted drilling, causing output to fall rapidly.
The latest asset sale puts BP closer to its goal of selling $38 billion in assets by the end of this year, not including the TNK-BP stake.
The company has already sold assets worth about $26.5 billion since the beginning of 2010, Mr. Joyner of Investec said. Last month, BP announced an agreement to sell its Carson oil refinery in California and 800 gasoline stations to Tesoro for $2.5 billion.
The sale of the Gulf of Mexico assets is expected to close by the end of the year.
Posted By: Shawn H.
LONDON - BP agreed on Monday to sell stakes in a group of Gulf of Mexico oil fields to the Plains Exploration and Production Company of Houston for about $5.6 billion.
The announcement comes as Robert W. Dudley, chief executive of BP, is raising money to pay cleanup costs and potential fines resulting from a huge oil spill in the Gulf of Mexico in 2010. A sale of older, smaller assets in the Gulf of Mexico would be in keeping with this effort to sell mature fields.
"While these assets no longer fit our business strategy, the Gulf of Mexico remains a key part of BP's global exploration and production portfolio," Mr. Dudley said in a statement.
In May, BP said it was marketing its interests in a group of gulf fields, including Horn Mountain, Holstein, Diana Hoover, Ram Powell and Marlin. These fields have production of about 62,500 barrels a day, according to estimates by Stuart Joyner, an analyst at Investec in London. The figure is a little more than a quarter of BP's gulf production of 240,000 barrels a day in the three months ended June 30.
The sale of the fields does not mean BP is pulling out of the Gulf of Mexico, as the company expects output there to return to growth by 2014.
Mr. Dudley wants to focus on a group of other fields, including Thunder Horse, Atlantis, Mad Dog and Na Kika. BP is now appraising two new fields named Kaskida and Tiber that it thinks could also become major producers.
Oil from the Gulf of Mexico is among the most profitable in BP's portfolio because of relatively low taxes and exploration and development costs, BP executives and analysts say.
BP had production of more than 400,000 barrels a day in the Gulf of Mexico before the April 2010 explosion at its Macondo well, which killed 11 people on the Deepwater Horizon rig and halted drilling, causing output to fall rapidly.
The latest asset sale puts BP closer to its goal of selling $38 billion in assets by the end of this year, not including the TNK-BP stake.
The company has already sold assets worth about $26.5 billion since the beginning of 2010, Mr. Joyner of Investec said. Last month, BP announced an agreement to sell its Carson oil refinery in California and 800 gasoline stations to Tesoro for $2.5 billion.
The sale of the Gulf of Mexico assets is expected to close by the end of the year.
Posted By: Shawn H.
No comments:
Post a Comment