BP sells Gulf assets for $5.55B to cover cost of oil spill

GULF OF MEXICO — Oil company BP said today it is selling some deep-water assets in the Gulf Mexico to Plains Exploration & Production Co. for $5.55 billion, a big step in BP’s drive to cover the cost of its oil well blowout in the Gulf two years ago and concentrate investment elsewhere.

BP is selling its interests in three BP-operated assets: the Marlin hub, Horn Mountain and Holstein. The deal also includes BP’s stakes in two non-operated assets, Ram Powell and Diana Hoover.

Plains is also buying the 50 percent interest in the Holstein field that BP doesn’t own from Shell Offshore Inc. for $560 million. Both deals are expected to close by the end of the year.

“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 and we intend to continue investing at least $4 billion there annually over the next decade,” said BP CEO Bob Dudley.

BP shares were up 1.1 percent at 439 pence in London trading following the announcement.

BP said it expects to dispose of $38 billion in assets between 2010 and 2013; total sales agreed so far are more than $32 billion.

BP will concentrate future activity and investment in the Gulf of Mexico on growth opportunities around its four major operated production hubs and three non-operated production hubs in the deepwater, as well as on significant exploration and appraisal opportunities in the Paleogene and elsewhere.

BP will continue to operate four major production platforms in the region: Thunder Horse, Atlantis, Mad Dog and Na Kika. It will also hold on to three other hubs which it doesn’t operate.

The company now has six drilling rigs operating in the Gulf of Mexico and expects to have eight rigs in place by the end of the year, the most it has ever had in the region.

In a related item, Transocean, Ltd. and the Justice Department have discussed a $1.5 billion settlement that would resolve federal civil and criminal claims against the company over its role in the deadly 2010 rig explosion that spawned the nation’s worst offshore oil spill.

But Switzerland-based Transocean Ltd. said in a regulatory filing today that a “number of issues,” including the possible time period for payment, must be resolved before a deal can be completed.

A Justice Department spokesman declined to comment.

Transocean owned the Deepwater Horizon drilling rig, where 11 workers died in an April 2010 explosion triggered by a blowout of BP’s Macondo well.

Transocean also says it rejected settlement offers earlier this year from BP and a group of private attorneys for Gulf Coast residents and businesses.

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