BP snaps up Devon's oil rights
By Robert Barr |
March 12, 2010, Friday
|
Print Edition
Print Edition
OIL company BP Plc said yesterday it will pay US$7 billion to acquire exploration rights from United States-based Devon Energy Corp to strengthen BP's dominant position in the Gulf of Mexico and give it access to offshore Brazil.
BP will buy the rights for 10 offshore exploration blocks in Brazil and a portfolio of rights in the US Gulf of Mexico and in the Caspian Sea.
BP said it is also selling, for US$500 million, a 50 percent stake in its Kirby oil sands interests in Canada to Devon, based in Oklahoma City, Oklahoma.
Devon is repositioning itself to concentrate on its North American onshore natural gas and oil portfolio.
"These sales, combined with our previously announced divestitures of US$1.3 billion of deep water Gulf of Mexico assets, put Devon well on the way to completing its strategic repositioning," said Larry Nichols, Devon's chairman and CEO. In December, Devon sold stakes in three development projects in the Gulf of Mexico to Maersk Oil for US$1.3 billion.
"Given any reasonable sales price for Devon's remaining divestiture assets, the transactions to date suggest that our total after-tax proceeds for the entire divestiture program will exceed our previously announced range of US$4.5 to US$7.5 billion," Nichols said.
BP is the largest leaseholder in the Gulf of Mexico with more than 650 blocks producing about 400,000 barrels of oil daily. Devon has interests in more than 450 offshore blocks in the Gulf that account for about 7 percent of Devon's total oil and natural gas production.
In Brazil Devon has interests in 10 offshore blocks covering 1.4 million acres. It has been working with Brazilian oil company Petrobras on five of the blocks. BP completed exploration of two deep-water blocks off Brazil in 2004.
BP will buy the rights for 10 offshore exploration blocks in Brazil and a portfolio of rights in the US Gulf of Mexico and in the Caspian Sea.
BP said it is also selling, for US$500 million, a 50 percent stake in its Kirby oil sands interests in Canada to Devon, based in Oklahoma City, Oklahoma.
Devon is repositioning itself to concentrate on its North American onshore natural gas and oil portfolio.
"These sales, combined with our previously announced divestitures of US$1.3 billion of deep water Gulf of Mexico assets, put Devon well on the way to completing its strategic repositioning," said Larry Nichols, Devon's chairman and CEO. In December, Devon sold stakes in three development projects in the Gulf of Mexico to Maersk Oil for US$1.3 billion.
"Given any reasonable sales price for Devon's remaining divestiture assets, the transactions to date suggest that our total after-tax proceeds for the entire divestiture program will exceed our previously announced range of US$4.5 to US$7.5 billion," Nichols said.
BP is the largest leaseholder in the Gulf of Mexico with more than 650 blocks producing about 400,000 barrels of oil daily. Devon has interests in more than 450 offshore blocks in the Gulf that account for about 7 percent of Devon's total oil and natural gas production.
In Brazil Devon has interests in 10 offshore blocks covering 1.4 million acres. It has been working with Brazilian oil company Petrobras on five of the blocks. BP completed exploration of two deep-water blocks off Brazil in 2004.
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