BP to sell mature GoM assets worth $ 650 mm

Oct 27, 2010 12:00 AM

BP announced that it has reached agreement to sell its recently-acquired interests in four mature producing deepwater oil and gas fields in the US Gulf of Mexico to Marubeni Oil and Gas for $ 650 mm. BP acquired the interests in the fields -- Magnolia, Merganser, Nansen and Zia -- from Devon Energy earlier in 2010 as part of a wider acquisition of assets in the Gulf of Mexico, Brazil and Azerbaijan.

Unlike the British oil giant's latest string of divestments in its international assets, the proceeds of which have mainly gone towards paying for the clean-up effort and subsequent compensation costs associated with the Gulf of Mexico disaster, this latest arrangement falls under more conventional circumstances according to Andy Hopwood, BP executive vice president, Strategy and Integration.

"When BP acquired Devon's Gulf of Mexico assets it was clear that these four fields did not fit well with the rest of our business in the region. We therefore decided they would be of more value to another company than to BP," he said.

Marubeni will pay BP $ 650 mm in cash for the interests, subject to customary post-closing adjustments and the parties anticipate completing the deal in early 2011.

According to a statement by BP, the assets included in the agreement comprise:

• 25 % interest in the ConocoPhillips-operated Magnolia oil and gas field in the Garden Banks area of the Central Gulf

• 50 % interest in the Anadarko Petroleum-operated Merganser gas field in the Atwater Valley area of the Central Gulf

• 50 % interest in the Anadarko Petroleum-operated Nansen oil and gas field in the Western Gulf; and

• 65 % operating interest in the Zia oil and gas field in the Mississippi Canyon area of the Central Gulf BP's net production from these fields is approximately 15,000 boepd.

BP acquired a range of deepwater Gulf of Mexico assets from Devon Energy as part of a deal announced in March 2010.

This latest agreement does not affect BP's other interests in the Gulf of Mexico where it is both the largest producer of oil and gas - with current net production totalling approximately 400,000 boepd -- and the largest holder of leases.

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