BP to sell stake in four Gulf of Mexico oil fields to Marubeni for $650 million

Oil giant, BP today said that it has agreed to sell its recently-acquired interests in four mature producing deepwater oil and gas fields in the US Gulf of Mexico to Japan's Marubeni Oil and Gas, for $650 million.

London-based BP had 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. (See: BP to buy Devon Energy's LatAm, Azerbaijan oil and gas assets for $ 7 billion

BP had acquired the assets in March, just two months prior to its Gulf of Mexico disaster in April where an explosion on the Deepwater Horizon rig killed 11 workers and its Macondo oil well spewed 206 gallons of crude oil for nearly four months creating the biggest oil spill in the history of the US.

Marubeni will pay BP $650 million in cash for BP's interests, subject to customary post-closing adjustments. Dependent upon regulatory approval, the parties anticipate completing the deal in early 2011.

The assets included in the sale are BP's 25 per cent interest in the ConocoPhillips-operated Magnolia oil and gas field in the Garden Banks area of the Central Gulf; a 50 per cent interest in the Anadarko Petroleum-operated Merganser gas field in the Atwater Valley area of the Central Gulf; a 50 per cent interest in the Anadarko Petroleum-operated Nansen oil and gas field in the Western Gulf; and a 65 per cent 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 barrels of oil equivalent a day (boed).
Despite this sell off, BP is the largest holder of leases and both the largest producer of oil and gas in the Gulf of Mexico- with current net production totalling approximately 400,000 boed.

"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," said Andy Hopwood, BP executive vice president, Strategy and Integration.

The sale is also linked to the oil major's plan of selling as much as $30 billion of assets over 18 months in order to fund the Gulf of Mexico oil spill.