BP to buy Devon Energy's LatAm, Azerbaijan oil and gas assets for $ 7 billion
11 March 2010
British oil giant BP today said that it will pay one of the largest independent US oil and gas companies, Devon Energy Corporation $7 billion in cash for its oil and gas assets in Brazil, the Gulf of Mexico and Azerbaijan to enhance its position in core strategic areas.
In November 2009, Devon had revealed plans to divest all of its oil asets in the Gulf of Mexico as well as in other countries, in a move to focus on its core onshore portfolio in North America and repay its debt. (See: Devon Energy plans to raise up to $7.5 billion through asset sales)
The Oklahoma City-based company expects to generate $4.5 billion to $7.5 billion through the sale, and hopes that the strategic repositioning would be highly accretive to company's earnings, cash flow, and reserves beginning from 2011.
A month later, Devon sold its interests in the Cascade, Jack and St. Malo oil fields in the Gulf of Mexico to A P Moller-Maersk Group, the Danish diversified business group with interests in container services, energy and shipping for $1.3 billion. (See: Maersk acquires Devon Energy's Gulf of Mexico oil stakes for $1.3 billion)
The deal gives the London-based BP its first entry into the Brazilian deepwater and also strengthens its position in the Gulf of Mexico and Azerbaijan, while it focuses on the development of its Canadian assets.
In a broad-ranging deal, BP will get 10 exploration blocks in Brazil, including seven in the prolific Campos basin, a major portfolio of deepwater exploration acreage and prospects in the US Gulf of Mexico.