Sep 11, 2017

BP folds Argentine assets into JV backed by Cnooc

BP has agreed to fold its Argentine assets into a new joint-venture backed by Cnooc of China in a deal that widens both groups' interests in a country boasting some of the most promising shale oil and gas resources outside the US. Pan American Energy, an Argentine oil and gas producer 60 per cent owned by BP, will be combined with Axion Energy, one of the Latin American country's largest oil refiners and fuel retailers, to create a new integrated energy group. Bridas already owns the 40 per cent of PAE not held by BP and Axion is the primary customer for PAE's Argentine crude oil output. No cash payments will be made by either party for the equity exchange, which BP said would create the largest private Argentine energy company. PAE accounted for 18 per cent of Argentine oil and gas production last year, with average output of 262,000 barrels a day. BP said the deal reflected its faith in the integrated oil and gas model - stretching from oil well to petrol pump - to create more value than upstream exploration and production assets on their own.

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