BP Sells Gulf of Mexico Fields to Pay for Oil Disaster

October 25, 2010

BP agreed to sell four fields in the deepwater of the Gulf of Mexico to Japan’s Marubeni Corp. for $650 million, as the oil major seeks to raise cash to pay for its oil spill in the region.

BP has committed to selling up to $30 billion in non-core assets to pay for the clean up of the U.S.’s worst ever oil spill, and to compensate victims. Last week, the company agreed to sell a package of oil and gas fields in Vietnam and Venezuela to its Russian joint venture TNK-BP for $1.8 billion.

BP and Marubeni Corp. said on Monday that Japan’s fifth-largest trading house would buy BP’s interests in the Magnolia, Merganser, Nansen and Zia fields, representing output of 15,000 barrels of oil equivalent per day of oil and gas.

The interests are part of a package of largely non-producing Gulf of Mexico assets, mainly focused on what is known as the Paleogene play, where the major Kaskida discovery was made, that BP agreed to buy from Devon Energy in March.

A BP spokesman said the interests in the mature fields being sold to Marubeni would have been sold even if BP had not had its oil spill.

“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,” Andy Hopwood, vice president for Strategy and Integration, said in a statement.

BP shares traded up 0.8 percent at 432 pence by 0953 GMT, outperforming a 0.02 percent fall in the STOXX Europe 600 Oil and Gas index.

Some U.S. lawmakers have called for BP to be barred from drilling in the Gulf of Mexico following its spill.

Last week, BP Chief Executive Bob Dudley stepped up his battle to rebuild the troubled oil giant’s reputation, declaring safety would be the sole measure for staff bonuses in the last quarter of this year.

With BP the largest producer and leaseholder in the Gulf, investors fear that a drill ban, or even a severe hardening of regulators’ approach to the company, could stunt its growth in the region.

When Marubeni completes the purchase by early 2011, its oil and gas upstream assets will total 50,000 bpd of crude oil equivalent, up 43 percent from 35,000 bpd currently, a Marubeni spokesman said.

“Marubeni and BP have had a business partnership in the Gulf of Mexico from before the accident,” the spokesman said, referring to the April 20 well rupture.

“These wells have had a track record of operating without problems for about 10 years,” the spokesman said.

(Reporting by Osamu Tsukimori and Risa Maeda; Editing by Joseph Radford, Sharon Lindores)

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