BP has teamed up with Argentina’s biggest independent oil and gas holding company to create the largest privately-owned integrated energy company in the country.
The pair will combine interests in the oil and gas producer Pan American Energy (PAE) and the refiner and marketer Axion Energy (Axion) in a cash-free transaction.
The new joint venture, Pan American Energy Group (PAEG) will be owned equally by BP and Bridas Corporation, itself a 50:50 joint venture of Bridas Energy Holdings of Argentina and CNOOC Limited of China.
PAE is currently owned 60% by BP and 40% by Bridas, while Axion is wholly-owned by Bridas. There will be no payments for the equity exchange.
The combination of PAE and Axion under unified ownership will align the PAEG shareholders’ interests across the upstream and downstream value chains in Argentina, Uruguay and Paraguay.
PAEG is expected to benefit from BP’s global upstream technical and downstream marketing experience as well as Bridas’ deep operating knowledge. The combination may also offer further integration synergies; the Axion refinery is already the primary customer for PAE’s Argentine crude oil production.
“Supported by the combined skills and expertise of BP and Bridas, this new integrated business will be able to pursue growth and development opportunities in Argentina, Uruguay, Paraguay and Mexico,” said Bob Dudley, BP Group Chief Executive.
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