BP announced November 28th that it has entered into an agreement to sell its interests in Pan American Energy (PAE) to Bridas Corporation. PAE is an Argentina-based oil and gas company owned by BP (60 per cent) and Bridas Corporation (40 per cent).
Bridas Corporation will pay BP a total of $7.06 billion in cash for BP’s 60 per cent interest in PAE. The transaction is expected to be completed in 2011.
The sale of its interests in PAE is part of BP’s plan, announced in July 2010, to divest up to $30 billion of assets by the end of 2011. Before the agreement to sell its interests in PAE, BP already had sales agreements in place totalling some $14 billion. The proceeds of the sale announced today will be used by BP to increase the cash available to the group.
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.
Under the terms of the agreement, Bridas Corporation is required to pay BP a cash deposit of $3.53 billion with the balance of the proceeds due on completion of the sale. $1.41 billion of this deposit is due to be paid on December 3, 2010, with the balance of $2.12 billion to be paid by Bridas Corporation on December 28, 2010.
The transaction excludes the shares of PAE E&P Bolivia Ltd, and the figures below exclude amounts attributable to PAE E&P Bolivia Ltd.