OGJ Oil Diplomacy Editor
LOS ANGELES, July 20 -- BP PLC said it has entered into several agreements to sell Apache Corp. some of its upstream assets valued at $7 billion. Among the assets are BP’s Permian basin assets in Texas and New Mexico; its western Canadian upstream gas assets; and the Western Desert business concessions and East Badr El-din exploration concession in Egypt.
“Over the last 2 months the board has considered BP’s options for generating the cash necessary to meet the obligations likely to arise from the Gulf of Mexico oil spill,” said BP Chairman Carl-Henric Svanberg. He added, “The board believes that there are opportunities to divest assets which are strategically more valuable to other parties than they are to BP.”
G. Steven Farris, Apache’s chairman and chief executive officer, said, “This transaction provides a sustainable growth platform for Apache’s onshore North America operations as well as strategic infrastructure and exploration potential in Egypt.”
BP said each sale will take place through a separate agreement between BP and Apache, and none of the sales will be conditional on completion of any of the other sales occurring.
Although each of the transactions is subject to certain regulatory approvals, BP said it is “expected that they will all be completed during the third quarter of 2010.”
On July 30, Apache is due to pay BP a cash deposit of $5 billion in aggregate, to be split $3.25 billion for Canada, $1.5 billion for Permian, and $250 million for Egypt.
BP said the ten Permian basin fields include Block 31, Empire-Yeso, SELea, Brown Bassett, Block 16/Coy Waha, Spraberry, Wilshire, North Misc, Pegasus, and Delaware Penn in Texas and southeast New Mexico.
“Included in the sale of such interests are the two BP-operated gas processing plants at Block 31 and Crane and nonoperated interests in the Terrell gas processing facility,” BP said.
Altogether, BP’s Permian basin assets produce 15,100 b/d of liquids and 80 MMscfd of gas. It noted that 126 million boe of net proved reserves and 148 million boe of net resources are associated with these assets.
BP said the total consideration payable for the western Canadian gas assets is $3.25 billion. About 214 million boe of net proved reserves and 1.368 billion boe of net resources are associated with these assets.
The upstream western Canadian gas business has net production of 240 MMcfd of gas and 6,500 b/d of liquids.
BP said the producing assets that are included, both operated and nonoperated, are managed by the following operating areas: Noel, Ojay, Chinchaga, Wapiti, Fox Creek, Edson, Marten Hills, South West, and St. Lina. Also included is the proposed Mist Mountain coalbed methane project.
The total consideration payable for the Western Desert business concessions and East Badr El-din exploration concession is $650 million, BP said, adding that the net production of the assets being sold is about 6,016 b/d of oil and 11 MMscfd of gas.
BP said that about 20 million boe of net proved reserves and 55 million boe of net resources are associated with these assets.
The sale includes the East Badr El-din concession where BP has an exploration license with a 100% interest and BP’s interests in the Western Desert business concessions.
Contact Eric Watkins at email@example.com.