The major deal of the past month is BP's sale of its 60% interest in Pan American Energy LLC to Bridas Corp., the oil company owned by Argentina's billionaire Bulgheroni family and China's CNOOC Ltd. for US$7.06 billion. Pan American's asset base is in South America, and Bridas and CNOOC already own the other 40% stake in the company.
Under terms of the deal, Bridas and Beijing-based CNOOC will each pay $2.47 billion to finance the acquisition, with the remaining US$2.12 billion to come from third-party loans or additional funds from the two companies, according to a statement issued by CNOOC on Nov. 28. The deal will be completed in the first half of 2011.
In March 2010, CNOOC paid US$3.1 billion to acquire half of Bridas Energy Holdings. Pan American, headquartered in Buenos Aires, produces about 240,000 barrels of oil equivalent per day and has proven reserves of 1.54 billion barrels. Since 2001, Pan American has invested US$6.7 billion in exploration and production, enabling it to boost output by about 70%.
BP's move was part of a continuing global effort to raise cash to meet compensation claims after the April 2010 Deepwater Horizon disaster in the Gulf of Mexico. BP has been scrambling to raise cash and reportedly needs to raise about US$30 billion by mid-2011 to help pay the cleanup costs and some of the compensation claims.
The second-largest deal of the month is the acquisition by China Petroleum Corporation (Sinopec) of Occidental Petroleum's Argentine assets for around US$2.5 billion. The transaction was made public on Dec. 10 and is expected to be completed by the end of the first quarter.
Occidental is using the proceeds of the sale to acquire US assets in South Texas and North Dakota, to increase its stake in Plains All-American, to acquire a 505 JV interest in the Elk Hills Power Plant, and to increase its common dividend rate by 21%.
The two largest US deals belonged to Occidental Petroleum. In one deal, Oxy purchased US Gulf Coast assets from Shell for an estimated US$1.8 billion. The assets, which currently produce roughly 200 million cubic feet per day of gas equivalent, will be 100% operated by Oxy. Secondly, Oxy purchased 180,000 net contiguous acres in North Dakota which produce from the Bakken and are prospective in the Three Forks formation from an undisclosed private seller for US$1.4 billion.