BUENOS AIRES, Nov. 30 (UPI) -- BP is bowing out of Argentina with the final sale of its key stake in Argentine oil and gas company Pan American.
BP's move was part of a continuing global effort to raise cash to meet compensation claims after the April 2010 Deepwater Horizon disaster in the Gulf of Mexico. Industry figures indicated BP might have to sell more assets worldwide to raise cash for the multiple multibillion-dollar compensation claims.
The Deepwater Horizon oil spill flowed for three months, the largest accidental marine oil spill in the history of the petroleum industry. The explosion killed 11 men working on the platform and injured 17 others. On July 15, BP managed to plug the leak by capping the well head after it had released about 4.9 million barrels of crude oil.
The latest deal involves BP selling its 60-percent stake in Pan American Energy to its joint-venture partner Bridas, which is owned in equal parts by China's National Offshore Oil Co. and the Bulgheroni family of Argentina.
BP has been scrambling to raise cash after the Deepwater Horizon debacle. BP needs to raise about $30 billion by mid-2011 to help pay the cleanup costs and some of the compensation claims.
The disaster was greeted with dismay by BP shareholders in Britain, who bought into the company in the belief it would be a secure investment. Vast individual and corporate fortunes, including pension funds, have been put on the line by the outcome of the spill.
On Sunday, BP said it reached an agreement to sell its part of Pan American Energy to Bridas Corp. for $7 billion.
Pan American Energy operates mainly in Argentina. It increased production by 70 percent after 2001. The BP stake represents about 917 million barrels of oil equivalent and a net production of 143,000 boe per day.
BP Chief Executive Officer Bob Dudley said the deal "demonstrates the high quality and attractiveness of the assets throughout BP's global portfolio" and emphasized BP's ability to meet (its) significant financial commitments arising from the Gulf of Mexico tragedy."
However, analysts said the deal signaled BP's final exit from Argentina and a further gain by CNOOC to increase its presence in the Latin American region. Earlier in 2010 CNOOC paid more than $3.1 billion to acquire half of Bridas Energy Holdings.
