BP sells assets worth $7bn

British Petroleum (BP) said Tuesday it will sell assets in the US, Canada and Egypt to Apache Corp. for $7 billion (Dh25.6 billion).

Apache said in a statement it had agreed to acquire all of BP's oil and gas operations, acreage and infrastructure in the Permian Basin of West Texas and New Mexico and in Egypt's Western Desert.

The transaction will also include "substantially all" of BP's upstream natural gas business in western Alberta and British Columbia, in Canada, said the Houston, Texas-based company.

"Apache will pay $7 billion for the assets, which include estimated proved reserves of 385 million barrels of oil equivalent," it said, referring to a unit of energy production based on the amount of energy released by burning one tonne of oil.

BP said last month it would sell $10 billion worth of assets this year to help pay for the mounting costs linked to its massive oil leak in the Gulf of Mexico, the worst environmental disaster in US history.

Byron Grote, BP's chief financial officer, said on June 16 the firm would sell mostly "non-core" assets.

Apache said it intends to finance the acquisition with a combination of debt and equity securities as well as cash on hand.

It will advance $5 billion of the purchase price to BP on July 30, ahead of the close of the transaction, which requires preferential rights and regulatory approvals in the US, Canada, Egypt and the European Union.

"This is a rare opportunity to acquire legacy positions from a major oil company, with oil and gas production, acreage, infrastructure, seismic data, field studies, exploration prospects and other essential aspects of our business," said G. Steven Farris, Apache's chairman and chief executive.

"We seldom have an opportunity like this in one of our core areas let alone three. This is a step change that will add muscle, enabling Apache to add value for decades to come through our demonstrated exploitation capabilities and exploration drilling."

The British energy giant BP on Monday raised the cost of its response to the disastrous Gulf of Mexico oil spill to $3.95 billion.

Follow Emirates 24|7 on Google News.