BP Planning To Offload US Oil Assets

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BP is planning to raise more than $3 billion (£2.4 billion) by offloading assets in the United States of America as it looks to pay for a deal to acquire oil fields from BHP.

Sources told Reuters that the sales will help the firm fund its $10.5 billion acquisition of onshore assets in Louisiana and Texas from BHP.

In the past, BP has said that it would be selling between $5 billion and $6 billion in assets in order to finance the deal.

Since the end of last November, the oil and gas giant has held a series of informal discussions with private equity companies to see if they can raise the cash required for the deal.

sources said that US funds Warburg Pincus and Carlyle have both expressed their interest in the assets.

BP is looking to offload seven packages, all shale fields that include in the San Juan basin by the Colorado-New Mexico border where the firm has 9,000 wells. The portfolio generates approximately $700 million in operating cashflow every year.

The news comes as the investor heighten the pressure on oil companies to increase their returns and reduce costs.

An analyst at Drillinginfo, Andrew Dittmar, stated: “That pressure is taking public companies out of the universe of buyers in the market, creating opportunities for private-equity companies.”

However, investors may be put off by the amount of gas that is on offer in the fields at a time when the gas production of the US is high, pushing down the prices.

London-listed BP is eager to focus on production from its assets in the Eagle Ford and Permian basins to match its rivals Chevron and Exxon Mobil who are set to increase their production in those areas.

Last week, BPX, the onshore business of BP, held a meeting with the management teams of the potential buyers in New York after sending out data on the assets that it is offloading.

The firm closed up approximately one percent on the London Stock Exchange to 502.5p yesterday.