BP announces latest asset sale

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Oil giant BP has sold more than £12 billion of assets to help pay for the Gulf of Mexico disaster

Oil giant BP has now sold 20 billion US dollars (£12.8 million) of assets to help pay for the Gulf of Mexico oil disaster after offloading its majority stake in an Argentina-based company.

The group announced it had sold its 60% interest in oil and gas firm Pan American Energy (PAE) to Bridas Corporation, a company half-owned by China National Offshore Oil Corporation, for 7.06 billion US dollars (£4.5 billion).

The sale brings BP closer to its target to sell up to 30 billion US dollars (£19 billion) of assets by the end of 2011 to help pay the compensation bill for the Deepwater Horizon explosion in April – which sparked the largest offshore oil spill in history.

Before the deal, BP had secured 14 billion US dollars (£8.9 billion) worth of asset sales, by selling interests in North America, Egypt, Venezuela, Vietnam and Colombia.

BP group chief executive Bob Dudley said: “Today’s agreement further demonstrates both the high quality and attractiveness of the assets throughout BP’s global portfolio and also the company’s ability to meet our significant financial commitments arising from the Gulf of Mexico tragedy.”

BP ultimately expects the cost of the oil spill to be in the region of 40 billion US dollars (£25.6 billion).

Earlier this month, BP revealed an additional charge of 7.7 billion US dollars (£4.9 billion), in addition to a 32.2 billion US dollar (£20 billion) hit in the second quarter.

The initial charge included a 20 billion dollar (£12.9 billion) compensation fund and sent BP into the red for the first time in 18 years.

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