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BP Said to Seek $7.9 Billion Selling Gulf of Mexico Fields

By Cathy Chan, Matthew Campbell and Brian Swint on August 14, 2012

BP Plc (BP/) is seeking as much as $7.9 billion before tax payments for a group of Gulf of Mexico oilfields as it unloads assets following its 2010 spill in the region, two people with knowledge of the matter said.

The oil producer, Europe’s biggest after Royal Dutch Shell Plc (RDSA), has prepared preliminary information for prospective buyers of assets including the Horn Mountain, Holstein, Diana Hoover and Ram Powell fields, said the people, who asked not to be identified because the sale process is confidential.

Because of taxes payable by the eventual buyer, the maximum proceeds BP can expect from the fields will probably be $5 billion to $6 billion, one of the people said. The fields, which hold proven reserves of about 120 million barrels of oil, produced about 58,000 barrels a day in the first quarter, the person said.

BP rose as much as 1.1 percent and traded up 0.6 percent at 449.40 pence as of 3:15 p.m. in London.

Chief Executive Officer Bob Dudley plans to sell $38 billion of assets by the end of next year, shrinking BP after the accident at its Macondo well, the worst offshore spill in U.S. history, wiped out a third of its market value. The London- based company said in May that it plans to sell some “non- strategic” assets in the Gulf.

“We’re progressing the planned divestments” in the region “to really focus our Gulf of Mexico footprint,” Dudley said on a July 31 conference call.

Robert Wine, a BP spokesman, declined to comment on details of the sale today.

Profitable Production

BP’s output in the Gulf of Mexico is some of the most profitable in its portfolio, and Dudley has said he wants to focus more on the production hubs of the Thunder Horse, Atlantis, Mad Dog and Na Kika fields. The company has six rigs working in the region and plans to have eight by the end of the year, the most ever.

Competitors including Norway’s Statoil ASA (STL) are also looking to expand in the region, which offers relatively low taxes and easy access to the U.S. energy market.

Two of the fields being sold by BP, Holstein and Horn Mountain, are already operating, and two are still in development, the people said. Bidders are likely to include U.S. companies such as Chevron Corp. (CVX) and Exxon Mobil Corp. (XOM), and it’s unlikely that all the fields will go to one buyer, one of the people said.

Yesterday, BP announced an agreement to sell its Carson oil refinery in California and 800 gasoline stations to Tesoro Corp. (TSO) for about $2.5 billion, bringing its total divestitures to about $26.5 billion since the beginning of 2010.

To contact the reporters on this story: Cathy Chan in Hong Kong at [email protected]; Matthew Campbell in London at [email protected]

To contact the editors responsible for this story: Jacqueline Simmons at [email protected]; Chitra Somayaji at [email protected]; Will Kennedy at [email protected]

SOURCE

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