The deal by BP to sell off its Argentinian assets has fallen through after the partner withdrew from the deal.
BP wanted to sell it’s stake in Pan American Energy (PAE) to their partner Bridas Energy Holdings in Argentina. BP currently hold a 60% stake in PAE.
Bridas are 50% owned by the Chinese offshore oil producer CNOOC, they are China’s largest oil producer offshore. CNOOC said on Sunday that they are terminating the deal which was signed in the wake of the Deepwater Horizon spill in the Gulf of Mexico last year.
BP was oping the sale would cover some of their costs from the spill. The deal was said to be worth an estimated £4.4bn ($7bn) and the largest of the assets sales agreed by BP following the disaster.
The termination means that BP will have to repay the $3.5bn deposit paid by CNOOC. The deal was dependent on regulatory approval. A BP spokesman said:
“The transaction was subject to conditions precedent – namely Argentine anti-trust and Chinese governmental approvals.”
“Bridas had not yet been able to satisfy these conditions precedent but the approval processes were ongoing and, for reasons known only to them, Bridas has chosen to terminate the transaction.”
The majority of PAE operations are in Argentina and they mainly focus on exploration and production of gas and oil.
BP shares may drop a little tomorrow but they are back to making profit. Their third quarter profits were £3.2bn ($5.14bn). That is almost three times the amount in the same quarter last year.
BP also announced that they want to increase their sale of assets to $45bn. So far the firm have managed to sell $19bn worth of assets, excluding the PAE deal.