NEW YORK (AP) — BP PLC said Tuesday it is selling assets in the U.S., Canada and Egypt to Apache Corp. for $7 billion to help pay the costs from the Gulf of Mexico oil spill.
The proceeds will go towards a $20 billion fund to help pay cleanup costs and damages from the spill. Apache has agreed to give BP a $5 billion cash deposit on July 30.
A month ago, BP said it planned to shed as much as $10 billion in assets over the next 12 months. The company has spent about $4 billion so far on containing and cleaning up the oil, as well as on damage claims from Gulf businesses.
BP shares rose almost 3 percent in after-hours trading while Apache shares dropped about 3 percent.
BP Chairman Carl-Henric Svanberg said the deal with Apache is the first transaction meant to help pay for the spill. “The board believes that there are opportunities to divest assets which are strategically more valuable to other parties than they are to BP,” he said.
Argus Research analyst Phil Weiss said Apache was a natural choice as buyer. The Houston company owns oil and gas assets near each of the properties BP is selling, so it has the staff and facilities in place to take them over.
BP said the assets include:
–Oil fields and gas processing plants in Texas and southeast New Mexico worth $3.1 billion;
–BP’s upstream Western Canadian gas business for $3.25 billion;
–Oil exploration and production assets in Egypt worth about $650 million.
BP earned $166 million last year from these properties, which are considered to be past their peak. But that shouldn’t be a problem for Apache, which under Chief Executive G. Steven Farris has gained a reputation for buying mature fields and finding a way to boost production, said Weiss.
The sale doesn’t include BP’s stake in Prudhoe Bay, countering published reports that said a deal with Apache for the Alaska field was in the works.