BP Sells Colombian Business to Cover Disaster Costs

Aug. 3, 2010
Companies Ecopetrol and Talisman paid $1.9 billion

BP said on August 3 that it will sell its Colombian business for $1.9 billion to national oil company Ecopetrol and Talisman of Canada.

The divestment is part of BP's plans to sell off up to $30 billion of assets as it faces soaring costs from the Gulf of Mexico oil spill disaster.

The news comes just one week after BP's vilified chief executive Tony Hayward resigned in the wake of a record second-quarter loss of $16.9 billion -- the biggest quarterly loss in British corporate history -- as it took charges against a clean-up bill put at $32.2 billion.

"BP ... has agreed to sell its oil and gas exploration, production and transportation business in Colombia to a consortium of Ecopetrol, Colombia's national oil company (51%), and Talisman of Canada (49%)," it said.

The Colombian assets hold reserves of 60 million barrels of oil equivalent (boe) and daily production is about 25,000 boe, BP said, adding that the unit employs some 470 staff of which most will transfer with the sale.

Hayward, who was widely panned for his handling of the Gulf spill, will step down in October and hand over to American executive Bob Dudley. "I am delighted with the price we have achieved for these assets," Hayward said.

"BP has been involved in Colombia for more than 20 years and played a major role in finding and developing the country's major oilfields.

"These have contributed significantly to BP's global production over the years. But it now makes sense for the assets to go to owners more willing than BP to invest in their future development."

The company agreed last month to sell assets in the United States, Canada and Egypt to Apache Corporation for $7 billion and has told Pakistan and Vietnam it intends to divest its upstream interests in those countries, the statement said.

BP separately said that it has so far asked its partners in the stricken Gulf well, Mitsui and Anadarko, to pay $1.67 billion as their share of the costs involved in the clean-up.

Copyright Agence France-Presse, 2010

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