Bridas Energy Holdings Ltd and Beijing-based Cnooc, which each own 50 percent of Bridas Corp., will pay $2.47 billion apiece to finance the acquisition, with the remaining $2.12 billion to come from third-party loans or additional funds from the two companies, Cnooc said in a statement yesterday. The deal will probably be completed in the first half of next year.
The Chinese company is building on the $3.1 billion acquisition of 50 percent of Bridas Corp. in March to expand its oil resources in Latin America as demand surges. Pan American, Argentina’s largest crude exporter, produces about 240,000 barrels a day and has proven reserves of 1.54 billion barrels. Since 2001, the company has invested $6.7 billion in exploration and production, enabling it to boost output by about 70 percent.
The sale price is “probably a fair deal for that asset base,” Jason Kenney, an Edinburgh-based oil and gas analyst at ING Commercial Banking, said in a telephone interview yesterday.
BP is aiming to conserve capital and avoid risk after the spill at its Macondo well in the Gulf of Mexico left it facing a bill projected to reach $40 billion and forced the resignation of Chief Executive Officer Tony Hayward. The oil company said in July it was planning to sell $30 billion in assets by end-2011. Including Pan American, it has sold about $21 billion of assets.
Pan American Bolivia
Pan American E&P Bolivia Limited, a branch of the company which operates gas fields in the South American country, was not included in the sale announced yesterday, Bridas said in an emailed statement. Bridas also owns rights over fields in Turkmenistan and Northern Africa.
“The market probably wrongly assumed that 60 percent was worth $9.3 billion, but that included the Asia options” and Bolivia, said ING’s Kenney, who had valued BP’s 60 percent stake at $9.3 billion. Citigroup Inc. had estimated the asset would be worth $10.2 billion, according to a Sept. 28 report.
Cnooc’s acquisition of the stake in Bridas earlier this year marked the company’s entry in Latin America and topped the $2.7 billion it paid in 2006 for a share in a Nigerian oilfield.
Cnooc’s latest acquisition takes total Chinese investments in the South American oil industry to more than $13 billion this year after China Petroleum & Chemical Corp., or Sinopec, in October agreed to pay $7.1 billion for a 40 percent stake of Repsol YPF SA’s Brazilian unit. In March, Ecuador announced a $500 million deal with Sinopec to develop an oil bloc.
BP Assets
In July, BP agreed to sell assets in North America and Egypt to Apache Corp. for $7 billion, while in August the company disposed of fields in Colombia to Ecopetrol SA and Talisman Energy Inc. for $1.9 billion. BP has also sold operations in Vietnam and Venezuela to its Russian joint venture partner TNK-BP for $1.8 billion.
Pan American had sales of $2.8 billion last year. Argentina’s largest oil producer is YPF SA, the local unit of Madrid-based Repsol YPF SA.
“This accord is a clear sign of the confidence that CNOOC and Bridas has in the Argentine energy sector,” Bridas President Carlos Bulgheroni said in a statement. The agreement will enable the company to “take on new challenges,” he said.
BP also agreed earlier this month to sell its fuels marketing businesses in Namibia, Botswana and Zambia to Puma Energy, as well as 50 percent interests in BP Malawi and BP Tanzania to a Trafigura Beheer BV unit for $296 million in cash. Last month, BP sold stakes in four Gulf of Mexico deepwater oil and gas fields for $650 million.
Bridas will pay BP a cash deposit of $3.53 billion and the remainder upon completion of the sale, BP said yesterday.
‘Agreements in Place’
“We now have agreements in place that should secure the majority of our divestment target,” Robert Dudley, who replaced Hayward as BP CEO, said in a statement yesterday. “We will continue to identify further assets that may be strategically more valuable to others than to BP as we complete the program.”
Cnooc said last month third-quarter revenue rose 64 percent as the company stepped up acquisitions and output to meet fuel demand in the world’s fastest-growing major economy. The company has spent more than $4 billion so far this year for oil and gas assets in Argentina and North America.
Overall Production
Production may reach 329 million barrels of oil equivalent this year, surpassing Cnooc’s target of as much as 290 million. Output growth in the third quarter benefited from contributions from Bohai Bay in northeastern China and overseas fields, Chief Financial Officer Zhong Hua said Oct. 28.
China’s oil demand may rise to 11.63 million barrels a day by 2015 from 9.16 million barrels a day this year, according to the International Energy Agency.
To contact the reporter on this story: Kari Lundgren in London at Klundgren2@bloomberg.net, Rodrigo Orihuela in Buenos Aires at rorihuela@bloomberg.net.
No comments:
Post a Comment