BP announces Brazil breakthrough

BP has announced a deal for core strategic exploration position in the deepwater offshore Brazil.

In a deal financed entirely by BP’s internal division, BP Finance, the fuel company will pay Devon Energy (DE) US$7bn in cash for assets in Brazil, Azerbaijan and the US deepwater Gulf of Mexico.

Furthermore, the deal was entirely overseen by BP’s internal legal team.

Tony Hayward, BP group chief executive, says: “This strategic opportunity fits well with BP’s operating strengths and key interests around the world, offering significant additional long-term growth potential with an emphasis on high-margin oil.”

Additionally, BP will sell DE a 50% stake in BP’s Kirby oil sands in Canada for US$500mn, with both companies agreeing to form a 50/50 joint venture, operated by Devon.

Devon has committed to fund an additional US$150mn on BP’s behalf.

BP is the Gulf of Mexico’s most prolific oil and gas producer, with 400,000 barrels produced a day from operated fields.