LONDON—BP PLC said Tuesday it has agreed to sell its Colombian oil and gas exploration and production business to Ecopetrol SA and Talisman Energy Inc. for $1.9 billion.
This is the latest deal as the company looks to divest $30 billion in assets over the next 18 months to raise money to cover the cost of the Gulf of Mexico oil spill. BP has already struck a $7 billion deal to sell assets in North America and Egypt to Apache Corp.
“I am delighted with the price we have achieved for these assets,” said BP Chief Executive Tony Hayward, who will step down on Oct. 1. “BP has been involved in Colombia for more than 20 years … but it now makes sense for the assets to go to owners more willing than BP to invest in their future development.”
BP posted a loss of $17.5 billion for its second quarter last week as the company took charges of just over $32 billion related to the oil spill. Asset sales will help to cover spill-related costs.
Ecopetrol, Colombia’s national oil company, will buy 51% of the business and Talisman 49%. They will pay BP a cash deposit of $1.25 billion and the balance when the deal passes regulatory approvals, expected by the end of this year.
BP’s Colombia business has interests in five producing fields, four separate pipelines and two offshore exploration blocks, the company said. Net proven reserves total some 60 million barrels of oil equivalent and net production of approximately 25,000 barrels a day.
The agreement doesn’t affect BP’s Castrol lubricants business and other downstream oil activities in Colombia. Barclays Capital acted as sole advisor to BP on the transaction.