Azerbaijan: BP to Buy Share in Azeri-Chirag-Guneshli Project for US$2 billion from Devon Energy

A transaction worth US$2 billion on the sale of Devon Energy company’s share in the Azerbaijani oil and gas project “Azeri-Chirag-Guneshli” will be concluded with British BP on August 16, Devon’s representatives said at the presentation of the report for the second quarter of 2010.

According to the company’s representatives, last week they received the necessary approval to execute this transaction. Obtaining regulatory approvals and consent of third parties involved in the project is necessary to approve the transaction.

In mid-March Devon Energy announced it has reached an agreement with BP on the sale of assets in Azerbaijan, Brazil and the Gulf of Mexico for $7.0 billion. In Azerbaijan, acquisition of Devon’s 5.63 per cent stake in the ACG development will increase BP`s operating interest in the fields to 39.77 per cent. Thus, after completing the deal, the share of BP in Azerbaijani project will increase by 39.76 per cent from current 34.14 per cent. According to BP, which is the operator of the project, proven oil reserves in the ACG hits more than seven billion barrels.

In its report, BP said that it would pay Devon Energy $7.0 billion in cash for assets in Brazil, Azerbaijan and the US deepwater Gulf of Mexico. These include interests in ten 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; and an interest in the BP-operated Azeri-Chirag-Gunashli (ACG) development in the Caspian Sea, Azerbaijan. In addition, BP will sell to Devon Energy a 50 per cent stake in BP’s Kirby oil sands interests in Alberta, Canada, for $500 million. The parties have agreed to form a 50/50 joint venture, operated by Devon, to pursue the development of the interest.


Source: tradingmarkets, August 9, 2010: