BP has planted its flag in oil-rich Brazil for the first time with a £4.7billion deal for deepwater assets.
Brazil’s proven oil reserves are second only to Venezuela in South America and BP said yesterday the move would offer it significant long-term growth potential.
The company is paying US firm Devon Energy for deepwater fields in the Campos Basin, an exploration hotspot where there have already been three discoveries.
BP will now begin detailed exploration of the region but does not expect to pump any oil until 2015 at the earliest.
The firm is also paying for Devon’s 30% stake in the Kaskida scheme in the Gulf of Mexico and assets in Azerbaijan. Chief executive Tony Hayward said: “This strategic opportunity fits well with BP’s operating strengths and key interests around the world, offering us significant additional long-term growth potential with an emphasis on high-margin oil.”
The Kaskida deal adds to BP’s leading position in the Gulf of Mexico, where it pumps 400,000 barrels of oil and gas a day from fields including Thunder Horse, Atlantis and Mad Dog.
Devon is selling the assets to concentrate on its unconventional oil and gas business in North America under a strategy announced last November. Under the deal, BP is also selling a 50% stake in its Kirby oilsand interests in Alberta, Canada, to the US firm, forming a joint venture to develop the field operated by Devon.
Evolution analyst Richard Griffith said: “This is a good deal for BP and is consistent with its recent comments that it sees more asset-based deals than corporate transactions.”
Just last week, BP signalled a massive vote of confidence in the North Sea by announcing plans to spend billions of pounds in Scottish waters over the next few years.
The oil giant revealed it was determined to invest heavily to keep production above 300,000 barrels a day at least until 2020.
The cash injection – against a background of declining overall output – is a welcome boost to service firms across the north-east, in addition to providing employment for BP’s North Sea workforce of more than 3,000.
ExxonMobil said yesterday it was well positioned for future growth with a healthy and geographically diverse portfolio of opportunities.
Chief executive Rex Tillerson said ExxonMobil was anticipating investment of about £18.66billion this year and £16.66-£20billion a year on average until 2014.
He said its major projects portfolio contained more than 130 oil and gas projects , representing 24billion barrels of oil, net to the group.
