Bloomberg News

Abu Dhabi’s Taqa Buys BP North Sea Assets for $1.1 Billion

November 28, 2012

BP CEO Bob Dudley

BP CEO Bob Dudley is shoring up the balance sheet of Europe’s second-biggest oil company as it faces a trial over civil fines in the U.S. next year. Photographer: Simon Dawson/Bloomberg

Abu Dhabi National Energy Co. (TAQA) bought stakes in North Sea fields for $1.1 billion from BP Plc (BP/), the energy producer that’s disposing of assets in the wake of the 2010 Gulf of Mexico oil spill.

Taqa, as the state-controlled power and oil company is known, will acquire interests in the Harding, Maclure and Devenick fields, BP said in a statement today. The deal also includes non-operated interests in the Brae and Braemar fields. The price doesn’t include future payments dependent on oil prices and production that BP expects to reach $250 million.

Today’s transaction adds about 21,000 barrels of oil a day to Taqa’s North Sea production, a 50 percent increase, and almost doubles the company’s reserves in the region. Taqa CEO Carl Sheldon said the company was open to further acquisitions.

“We’re here to stay in the North Sea,” Sheldon said on a conference call with journalists. “As opportunities present themselves, they’ll be considered.”

BP Chief Executive Officer Bob Dudley is shoring up the balance sheet of Europe’s second-biggest oil company as it faces a trial over civil fines in the U.S. next year. Today’s sale brings total disposals since 2010 to about $37 billion, close to the $38 billion target.

BP shares closed down 0.4 percent at 429 pence in London. The U.S. said the company will be temporarily barred from government contracts because of its conduct during the oil spill in 2010.

Growth Potential

“This transaction is in line with BP’s strategy to focus on a smaller number of higher-value assets with long-term growth potential,” Dudley said in the statement. It continues “the simplification of our portfolio with a further reduction of operated infrastructure and wells.”

BP is trying to move on from the Gulf spill, the worst in U.S. history, after reaching settlements with victims earlier this year and a $4.5 billion deal with the U.S. government to cover criminal and financial regulatory charges.

Chief Financial Officer Brian Gilvary said this month that BP had already made arrangements for the rest of the sales needed to reach the $38 billion goal. The company has set aside more than $40 billion to cover the costs of the spill.

Taqa has made a deposit of $632 million and the anticipated future payments will be made over three years, according to BP’s statement. The deal is expected to close in the second quarter of 2013.

Taqa, owned 75 percent by the Abu Dhabi government, holds stakes in businesses generating power or producing oil and gas in the Middle East, the North Sea, India and North America. The company, which has oil production assets in U.K. sections of the North Sea, is building the Bergermeer storage facility for natural gas in the Netherlands.

Jefferies Group Inc. served as a financial adviser to BP on the deal. Evercore Parnters advised Taqa.

To contact the reporters on this story: Brian Swint in London at bswint@bloomberg.net; Anthony DiPaola in Dubai at adipaola@bloomberg.net

To contact the editor responsible for this story: Will Kennedy at wkennedy3@bloomberg.net


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