BP Asset Sales
BP p.l.c. has been on a selling spree. In October the company struck a deal to sell its 50 percent stake in TNKBP, Russia's third-largest oil company, to OAO Rosneft Oil Company. BP will receive $12.3 billion in cash and an 18.5 percent stake in Rosneft worth about $14 billion. The parties hope to close the deal within six months. Rosneft will buy the rest of TNKBP from Alpha Access Renova, or AAR, the consortium of Russian billionaires that owns the other half of the company.
BP also agreed last year to five different U.S. asset sales of $1 billion or more that could net the troubled oil company up to $12.755 billion, money that will help defray costs associated with the Deepwater Horizon oil spill in 2010. BP announced within weeks of the disaster that it planned to sell up to $38 billion in assets. It began by selling $7 billion in oil and gas assets in Texas, New Mexico, Canada, and Egypt to Apache Corporation [Deals & Suits, October 2010] and has since sold properties all over the world.
The most recent flurry of sales started with the $1.2 billion sale of properties located in the Hugoton Basin in Kansas to Linn Energy LLC, a deal announced on February 25 and closed the next month. Linn also agreed on June 25 to pay BP $1.03 billion for natural gas fields in Wyoming, a deal that closed in July.
BP then struck a deal to sell its Carson, California, refinery, along with the facility's inventory of oil and 800 Arco-branded gas stations in Southern California, Nevada, and Arizona, to Tesoro Corporation for $2.475 billion on August 13. The parties hope to close before the middle of 2013.
On September 10 Plains Exploration & Production Company announced that it had agreed to pay BP $5.55 billion for oil and gas assets in the Gulf of Mexico. Plains will also pay Royal Dutch Shell plc $560 million for a 50 percent stake in the Holstein oil fields, the rest of which the buyer will purchase from BP. The parties expect to close by the end of the year.
BP also struck a deal on October 8 to sell its Texas City, Texas, refinery and related assets to Marathon Petroleum Corporation for $598 million in cash and as much as $700 million more over the next six years, depending on the refinery's profitability. Marathon will also pay $1.2 billion for the refinery's current hydrocarbon inventory. The parties hope to close the deal early in 2013. Regulators must approve the sales of the refineries and Plains's proposed acquisition of the Gulf of Mexico assets.
For buyer OAO Rosneft Oil Company (Moscow)
Corporate: Daniel Braverman, Russell Pollack, and associates Gabriele Antonazzo and Marie-Hélène Farrelly. Antitrust: Antoine Winckler. Russian law: Murat Akuyev and associates Yulia Savitskaya and Mikhail Suvorov. (Braverman, Antonazzo, and Farrelly are in London; Pollack is in Paris; Winckler is in Brussels; Akuyev, Savitskaya, and Suvorov are in Moscow.)
For buyer Plains Exploration & Production Company (Houston)
General counsel John Wombwell and assistant general counsel Carolyn Bertrand.