BP to sell Pakistan assets to Hong Kong's United Energy for $775 million

British oil giant BP plc, yesterday said that it will sell most of its assets in Pakistan to Hong Kong-based assets investment company United Energy Group (UEG), for $775 million in cash.

The deal knocked out a joint lower bid by Pakistan state owned oil Pakistan Petroleum Ltd (PPL) and Oil and Gas Development Co. Ltd. (OGDCL), the country's biggest listed firm.

The London-based BP had announced in July this year its decision to sell its upstream exploration and production assets in Pakistan as part of its bid to sell $30 billion of assets over 18 months in order to fund the Gulf of Mexico oil spill.

Proven reserves of these assets are 43.1 million barrels of oil equivalent (boe) and net production is about 35,000 boe a day. These assets contribute 14 per cent of Pakistan's total oil production and 6 per cent of its domestic gas production.

BP has not sold its stakes in three unexplored offshore fields, where OGDCL is the operator.

UEG will pay BP a cash deposit of $100 million, with the balance to be paid after all necessary governmental and regulatory approvals are received, which BP expects by the first half of 2011.